Between 2011 and 2021 the number of households renting privately increased by 151,800 in the 10% most deprived areas of England & Wales, compared to an 80,100 rise in the 10% least deprived areas, according to the latest Hamptons letting index,
Some 23% of households in the poorest 10% of the country now rent privately, up from 18% a decade ago, and well above the 13% that rent in the most affluent areas.
While the total amount of rent paid by the 10% most deprived areas has more than doubled in a decade, rising 102% from £2.7bn in 2012 to £5.4bn in 2022.
Across the whole of England & Wales tenants spent a total of £71.5bn on rent in 2022, a record figure. 54% of the decade’s growth came from rising rents, while 46% came from the increase in privately rented households.
The average rent on a newly let home in Great Britain ended the year at £1,216 pcm in December, 7.7% up on December 2021. This means that the average tenant moving home will now be paying an extra £1,044 in rent each year.
The good news for tenants is that rental growth has cooled from its summer peak of 11.5% in May 2022, however, it still marked the strongest annual growth recorded in any December since Hamptons records began in 2013.
Aneisha Beveridge, head of research at Hamptons, said: “Growth in the private rented sector over the last decade has come on the back of fewer younger people buying their own home, particularly in the less affluent areas. While tighter mortgage lending criteria introduced following the financial crash has reduced the number of borrowers struggling to make their mortgage payments, it has also put homeownership beyond reach for some people on below average incomes with small deposits.
“There has been an array of homeownership schemes over the last decade. And while they’ve helped hundreds of thousands of people onto the housing ladder, typically the biggest beneficiaries have been more affluent tenants. Higher interest rates are likely to exacerbate the divide between more and less affluent tenants further, putting mortgage payments for lower earners with limited savings out of reach.
“2022 has been a record-breaking year for rental growth. But even so, rents have failed to keep pace with wider inflation, and indeed landlords’ rising costs. With the cost of living crisis hitting tenants particularly hard, rental growth seems to have settled at a new pace, hovering around the 7% mark for the fifth consecutive month.
“While we may see the rate of growth soften a little more in the coming months, rents are still likely to rise around 5% in 2023 given the lack of homes available to rent and inflationary pressures on landlords.”
