The arrival of winter is a crucial milestone in the current cost of living crisis, and market analysis from Ocasa, the specialist rental platform, warns that the average rent bill could reach as much as £2,270/month if prices rise in line with the hikes already being seen across other living costs.
The cost of living is still on the rise. Numerous factors, both foreign and domestic, continue to have a direct and dangerous impact on the daily lives of millions of UK citizens. The surging price of energy has dominated headlines in recent months and shoppers nation-wide are wincing at the perpetually soaring cost of basic groceries.
The price of rent, however, has not yet matched the increasing costs seen across other areas of life. In the past year, the average cost of a month’s rent in the UK has increased by £98, rising from £1,061 in 2021 to £1,159 in 2022. This is an annual increase of 9.2%.
While this is certainly a notable rise, it’s nothing compared to the increases seen elsewhere. So what would the price of rent be if it did actually increase at the same rate of other living costs?
In the past year, the average price of energy has increased by an astonishing 95.8%. If rent had experienced the same annual increase, it would now cost a ghastly £2,269/month.
In London – the UK’s most expensive rental market at £1,752/month is 2021 – a 95.8% hike would bring the price up to £3,808/month.
In the South East, such an increase would mean that prices increased from £1,139 to £2,422, and even in the UK’s most affordable rental market, the North East, rent would now cost £1,192.
So how about grocery prices? In the past year, the average price of basic food items has risen by 13.9%. If rent did the same, the UK’s average monthly price would be £1,320.
In London, such a price rise would leave rent at £2,216/month; in the South East it would cost £1,409; and in the North East, the average would be £694.
The past months have also seen a sharp rise in inflation rates. Over the past year, they’re up 9.9%. The same rise in rent would leave the national average at £1,274/month while prices in London (£2,138), the South East (£1,359), and the North East (£669) would also leave renters significantly worse off.
Sales and Marketing Director at Ocasa, Jack Godby said, “Currently, and compared to other cost of living increases, tenants haven’t felt the squeeze quite as badly when it comes to their rental bill. However, it can only be a matter of time before this area of life also strains household finances as landlords raise rents in order to compensate for their own cost increases in both their personal and professional lives.
Many households who are already bracing for a very harsh winter are likely to be under even more strain before Spring 2023 and we expect that the cost of renting may well be yet another household outgoing driving this financial strain.”
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