Adjusting for inflation, renters are better off today than they were a year ago despite nominal rent increases of up to 14%, reveals research from Ocasa.
According to the specialist rental platform, without adjusting for inflation, the average price of rent in the UK is currently £1,143 per month.
This is 21.7% higher than 2017’s average of £939 and 8.5% higher than this time last year when the average price was £1,053.
However, despite the increasing cost of rent, when prices are adjusted for inflation, it’s revealed that renters are actually better off today than they were last year.
Jack Godby, sales and marketing director at Ocasa, said: “It’s quite crazy to think that the cost of renting is currently more manageable now than it was a year ago once adjusting for inflation.
“However, you’ll be hard pressed to find a tenant who believes they are in a better place when it comes to rental market affordability as they are currently being squeezed on all sides due to the cost-of-living crisis, with prices for everything from energy to groceries hitting unprecedented highs.
Regionally, recent rent hikes have been high, such as in Scotland where the nominal price of rent is now 13.6% more expensive than it was last year and almost 40% higher than it was five years ago.
In London it’s up 10.8% while in the North West and South East, there have been annual increases of 9.9% and 8.1% respectively.
After adjusting for inflation, the average rent in the UK this time last year was £1,162.
This is -1.7% cheaper than today’s average of £1,143 proving that, in real terms, tenants are actually paying a lower level today than last year due to the fact that the cost of renting, while certainly escalating, has not kept pace with inflation.
Renters are benefiting the most in the North East where the real cost of rent is -5.8% lower this year compared to last.
In the East Midlands, tenants are paying -3.7% less and in the South West, they’re -3.4% better off.
Renters aren’t, however, benefiting in all corners of the UK – once adjusted for inflation, rent in Scotland is 2.9% higher today than it was last year.
In Northern Ireland, the increase is 2.3% and in London, tenants are 0.4% worse off.
Godby added: “While the cost of renting may not have kept pace with inflation, it’s fair to say that the task of tackling the rental market has never been harder.
“And lest we forget that renters in London, Scotland, and Northern Ireland are going to feel the burn of rising costs even more than most, because their rent payments have grown so high that they are paying more even after adjusting for inflation.”
