The annual growth rate of rents for one bedroom properties in the UK rose sharply in September, driven by high demand from recent graduates renting to live near their first job, new data shows.
According to the monthly Landbay Rental Index, rents for one beds rose 3.9% to £1,054, up from 2.9% in August.
Across all properties, UK rents rose by 3.7% in last year to £1,281, the first increase in annual growth since February.
The biggest increase in rents for one bedroom flats was seen in Edinburgh (up 12%), Swindon (up 11%) and Southend on Sea (11%).
Landbay pointed out that while rent prices were increasing, other costs (September CPI) were falling and UK-wide wages were rising at 3% (UK Labour Market statistics).
Rents for three bed properties are currently seeing the biggest overall rental rises, up 4.8% year-on-year to £1,489 in September.
Meanwhile, the cost of living in the capital continues to remain high, with rents for one bedroom flats averaging over £1,000 a month in three quarters (73%) of London boroughs.
John Goodall, co-founder and CEO of Landbay, said: “The upward trend in UK rents can simply be explained with one word, jobs. The UK’s job market is going from strength-to-strength and the rental market is staying hot on its heels.
“Higher housing costs can be a nightmare for tenants when other costs are rising and their wages are stagnating. Fortunately these rent increases come at a time of growing wages and falling costs, according to the latest inflation figures, so while they may not be welcome they don’t leave the same dent in consumers’ pockets.
“For potential investors, these rental figures show how resilient residential property is as an asset class – even when you have unusual economic forces combining like the current mix of low inflation, low interest rate, and high wages.”
