Rents have fallen for the first time in more than a year – but experts say the decrease is just a blip and more rises are coming this year.
The average UK rent was £1,174 a month in December 2022, down 0.1 per cent, or £1, from the month before, according to the latest Rental Index from landlord insurance broker HomeLet.
Although it might seem miniscule, that drop marks the first month-on-month decrease in rent prices since November 2021.
When London is excluded from the figures the average rent in the UK was £977 a month, the same as November 2022.
Rents may have fallen, but experts say greater rises are coming as mortgage price hikes bite
Average rents in London saw a 0.2 per cent decrease in December. The area with the biggest drop in rent prices was the North East, where these costs fell 1.4 per cent to £618.
HomeLet chief executive Andy Halstead said: ‘The last month of 2022 saw the first drop in the average UK rental price for over a year, albeit a drop of just £1 month-on-month.
‘Even in the face of a minor dip, rental prices remain historically high, including December 2022 being only the second month on record in which the average Greater London rental property has been priced higher than £2,000 per calendar month.’
More rent hikes are coming
Experts agree that further rent increases are due as landlords sell up over non-payment fears and mortgage rate hikes.
Halstead said previous research from Dataloft found that 40 per cent of landlords’ main concern in 2023 was not getting rent payments from tenants. He added that ‘rental prices will likely continue to rise’ in 2023, despite spiralling costs for tenants in other areas of their lives.
| Region | Rent drop in £ | Rent Drop in % | Average December rent | |
|---|---|---|---|---|
| North East | £9 | 1.4% | £618 | |
| Northern Ireland | £7 | 0.9% | £774 | |
| South East | £5 | 0.4% | £1,235 | |
| South West | £4 | 0.4% | £1,081 | |
| Greater London | £4 | 0.2% | £2,007 |
Halstead said: ‘Tenants struggling to pay their rent is sadly likely to become a recurring theme across the country, and in turn, this could lead to some landlords vacating an already struggling market.
‘This will likely result in a continued shortage of rental properties to meet demand.’
Nathan Emerson, chief executive of estate agent trade body Propertymark, said that rents could rise as buy-to-let mortgage rates increase this year.
But most of the upward pressure on rents is caused by too few rental properties, he added.
There has been a 49 per cent decline in homes available to rent in letting agent branches since 2019, according to research by Propertymark.
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