According to property firm Zero Deposit, residents of the East Midlands are facing a daunting forecast: the cost of renting a home in the region is set to soar at an unprecedented rate. With predictions outpacing every other region in the UK, the climb in rents is a looming concern for many.
By the end of this decade, the average monthly rent in the East Midlands is expected to leap by a whopping 41%, skyrocketing from £747 in 2023 to an eye-watering £1,054 by 2030. This rise dwarfs the average predicted rise across England, which sits at a comparatively modest 16%, suggesting a nationwide rent increase but spotlighting the East Midlands as a particularly affected area.
The Root of the Rent Rise
At the heart of this forecasted increase lies a concerning trend: a dwindling stock of private rental sector (PRS) properties. The share of PRS stock, as a percentage of all dwellings in the East Midlands, has seen a decline from 18.7% to 17.3% in the latest data available from 2022. This drop of 1.4% signals a tightening market where demand increasingly outstrips supply.
While the East Midlands braces for the brunt of the rent hikes, the rest of England isn’t immune to rising rental costs. Sam Reynolds, Chief Executive of Zero Deposit, highlights a worrying trend across the nation: “Since 2013, the average rent across England has increased every year, except for 2017 and 2020, with the average tenant now paying 37% more than a decade ago—an increase of £266 more per month.”
This surge in rental costs significantly outpaces earnings growth, with wages having risen by just 30% during the same period, as per the Office for National Statistics. This disparity not only puts a strain on tenants’ monthly finances but also burdens them with higher initial deposits required to secure rental homes.
The Underlying Issue
The crux of the matter, according to Reynolds, is the acute shortage of rental stock available to meet the surging demand. With the cost of homeownership spiraling out of reach for many, long-term renting has become a more widely accepted lifestyle choice, further exacerbating the demand for rental properties.
The government’s lack of action to address this imbalance has been criticised, with predictions that rents will continue to climb if solutions are not found and implemented.
London’s Rent Reality
Despite the sharp increases forecasted for the East Midlands, London retains its title as the least affordable rental market in the UK. The capital is expected to see a 12% increase in rent costs, adding another £234 to the average monthly rent, which will push it to an astonishing £2,107.