Rents rising faster than mortgage payments

Private renters are seeing costs rise at a faster rate than mortgaged homeowners, analysis from Zoopla has revealed.

In the past three years the average mortgage repayment has risen by £218 to £1,283 per month. Over the same period, rents for new lets rose by £221 to £1,154 per month.

Demand for rents surged in 2022 and 2023 while available rental stock remained broadly static.

Richard Donnell, executive director at Zoopla, said: “Renters have faced… steep increases in the cost of renting in recent years with rents pushed higher on string demand and limited supply of homes for rent which has hit lower income renters hardest.”

He added: “The quickest way to alleviate high rents is to grow the stock of homes for rent in both the social and private rented sectors.

“Growing housing supply is a key government target and it’s vital that the stock of rented homes is expanded across all tenures.”

Oldham, Wigan and Bolton have seen the cost of renting increase by 31% in the past three years.

In London meanwhile the greatest increases to rents have come in more affordable areas of outer London, like Ilford in East London.

Despite concerns about the cost of renting, inflation for new lets is now running at its lowest rate for four years.

Zoopla said this is due to lower levels of migration for work and study, improvements in mortgage market conditions for first time buyers, as well as squeezed rental affordability.