Recent figures from Dataloft show that Brits under 30 are facing a cost-of-renting crisis with four-in-ten now spending more than 30 per cent of their pay on rent – representing a five-year high.
Rents in the UK have risen by an average of 8.3 per cent over the last 12 months – pushing rents to 15.7 per cent above pre-pandemic levels. July 2020 and July 2022 marked the largest erosion of tenants’ buying power since the launch of Hamptons lettings index in 2013.
Rent, on average, has risen 16.2 per cent, or £165 a month. Inner London saw the fastest rental price hike in the UK over the past year as rents climbed 33.6 per cent compared to the same time last year. The rental market applies pressure on young people’s finances which are already strained due to rising living costs and plateauing in income levels. The least affordable areas for renters under 30 are, unsurprisingly, located in London with under-30s spending an average of 35 per cent of their monthly earnings on rent. This comes amidst new research from the Office for National Statistics (ONS) which revealed that the annual rate of growth in UK house prices has taken a sharp fall, from 12.8 per cent to 7.8% in a month. However, the same report also showed the average value of a house in the UK increased by £3,000 in June, bringing the figure up to £286,000.
This comes after online realtor, Rightmove, revealed that in August, the average price of a property dropped to £365,173, marking a £4,795 decline on July’s figures. Now, it seems that soaring interest rates – in response to the country’s severe inflation woes – could start to weigh down the housing market in the second half of the year. The average price now stands at £294,845, which represents a 6.8 per cent, or £18,849 rise since the start of the year. This means that house prices have risen every month over the last year as the supply-demand imbalance continues to be the main contributor to this. Indicating major obstacles it the UK property market to both buyers and renters.