- December 2022 sees a slight rent decline on average by £1
- First monthly rent decline observed since 2021, marking a noteworthy shift
- Experts in the property market predict rent hikes to occur later this year
Rental prices have seen a slight decline for the first time in over a year, but experts believe this is just a temporary setback, and we can anticipate more increases in the coming months.
UK Rental Prices Experience First Month-on-Month Dip Since November 2021: HomeLet Rental Index
In December 2022, the average rent in the UK dipped to £1,174 per month, a marginal 0.1% decrease, or £1 lower than the previous month, as reported by the latest Rental Index from HomeLet, a landlord insurance broker. This seemingly insignificant decline marks the first month-on-month drop in rental prices since November 2021.
Excluding London, the average UK rent remained unchanged at £977 per month in comparison to November 2022. London’s average rents experienced a 0.2% drop in December. The North East region witnessed the most significant decline, with rental prices falling 1.4% to £618.
HomeLet CEO Andy Halstead noted that despite the slight decrease, rental prices remain historically high. He highlighted that December 2022 was only the second time the average Greater London rental property exceeded £2,000 per calendar month.
Experts Predict More Rent Increases in 2023 as Landlords Face Non-Payment Concerns and Mortgage Rate Hikes
Experts predict more rent increases as landlords face non-payment concerns and mortgage rate hikes. Halstead cited previous research from Dataloft, which revealed that 40% of landlords’ primary worry in 2023 was not receiving rent payments from tenants. Consequently, rental prices are likely to continue rising in 2023, despite increasing financial burdens for tenants in other aspects of their lives.
Halstead further explained that tenants’ difficulties in paying rent may become a recurring issue across the country, potentially causing some landlords to exit the already strained market. This could lead to an ongoing shortage of rental properties to meet demand.
Nathan Emerson, CEO of estate agent trade body Propertymark, suggested that rising buy-to-let mortgage rates could also contribute to rent hikes this year. However, he emphasized that the primary cause of upward pressure on rents is the insufficient number of rental properties. Research by Propertymark indicates a 49% decrease in available rental homes in letting agent branches since 2019.
Its not only rents dropping house prices are expected to drop this year.