The UK’s average rental growth has reached a 13-year high, up 8.3% in Q4 2021, according to the Zoopla quarterly Rental Market Report.
This will mean households who agree new lets are now having to pay an additional average annual cost of £744, compared to the start of the pandemic.
A single earner can now expect to spend 37% of their gross income on rent, which is up from 34% during most of 2021.
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However, this brings the figure broadly back in line with the longer-term average of 36% as rental growth rises in line with wage growth.
The overall increase in UK rents over the last five years has totalled 12% due to the decline in rents seen in some areas during the pandemic.
The New Year has seen heightened demand for rental properties, up 76% compared to the New Year markets between 2018 and 2021.
Despite this, the supply of rental properties recorded in January 2022 in the UK is 39% below levels typically observed at the start of the year.
On a regional basis, inner London has seen rental growth of 11% compared to the same time last year, which translates to an increase of just £18 per month in rent compared to March 2020.
Gráinne Gilmore, head of research at Zoopla, said: “Rents have risen sharply in recent months, amid a backdrop of rising living costs. But it is important to point out that in terms of rental affordability, in most markets rents are still close to the 10-year average.
“As demand continues to outpace supply, there will be further upward pressure on rents, but affordability considerations will act as a brake on large rises.
“The flooding of rental demand back into city centres thanks to office workers, students and international demand returning to cities means the post-pandemic ‘recalibration’ of the rental market is well underway.”
James Evans, chief executive at Douglas & Gordon, added: “Since the beginning of the year, we have seen a clear trend of people coming back to London and the office. This has contrib-uted to around a 40% increase in new lettings applicants compared to the same month last year.
“As there is also still a very restricted supply of properties, we’re seeing landlords achieve record prices, a high quality of tenant and almost no void periods.
“With competition for properties at the level it is, there are 35-40 new applicants for every rental property in London and around four offers received per agreed let, tenants are having to put themselves in the best position possible to get the properties they want.
“Following a strong sales market in 2021, and more confidence in future price increases in London, we are seeing more buy-to-let investors entering the market. With some of the recent legislation changes, the need for a quality agent is even greater.”