Average rents in the UK are now at their highest level on record, despite the slowest increase in three years.
According to the Countrywide monthly lettings index for January, last year average rents in the UK rose 1.2% to £906 a month.
The data also highlights the renting North-South divide.
London has seen rents rise more than anywhere in the country since 2007. They are now 34% higher than their pre-recession record, up from £966 to £1,295 a month despite average incomes only increasing by 10% in the same time.
As a result, tenants have had to either share, downsize or move further from the centre in order to accommodate this rise.
Despite widespread concern about increasing rents, the majority of the country has experienced rental growth in line with incomes over the past nine years. Figures from the ONS show average income has increased 12% since 2007 compared to a 12% increase in average rents.
In the North West, North East and Wales the average tenant is still paying less than they were in 2007 by £12 a month, although this is likely to change this year. Across the UK as a whole, one in five tenants is still paying less rent than they were in 2007.
Johnny Morris, research director at Countrywide, said: “Nationally rents in January rose at the slowest rate since 2012, as some of the upward pressure on prices subsided and affordability limited further rises. Across most of London and the South East the slowdown in rental growth is the first since 2010, where rents have been growing for the past 6 years.”
“The most sustainable way of creating a more affordable rental market in London and the South is by building more homes of every tenure. Unlike in the US where institutional investors build homes to rent, in the UK the sector is dominated by small landlords meaning the link between new homes getting built and the rental market isn’t nearly as close as it should be.”
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