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The average annual rent for a newly let property is £3,240 more than at the end of the coronavirus pandemic, according to figures from Zoopla.
Rents have started to soar in 2021 due to strong demand from tenants following the lifting of lockdowns and the limited number of properties available.
The annual cost of rent increased by 27% over these three years, compared to a 19% increase in average wages over the same period.
However, the rate at which rents are rising is now the slowest in three years, the property portal said, as potential tenants face limits on what they can afford.
Signs of market cooling
Tenants have faced a “hot” market in recent years, with multitudes of potential tenants chasing every available property and rents rising due to high demand. Demand is almost a third higher than before the pandemic.
This has led some candidates to offer months' rent upfront or write CV-style letters to agents to try to get ahead of the competition.
Zoopla said there were signs the market was cooling.
But those with the least to spend, in the cheapest areas, could now face the biggest rent increases.
“With more renters than there are homes to rent, people are looking for the best value for money,” said Richard Donnell, executive director of research at Zoopla.
“In cities, rents generally increase more quickly at the lower end of the market.”
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Student Blyth Eling (right) said her rent left her with 'virtually no spending money'
This could affect low-income people as well as students.
Blyth Eling, a student at the University of Brighton who works part-time alongside her studies, spends more than £1,000 a month on rent for a room in an apartment.
She recently told the BBC that accommodation was taking up “almost all of my student loan”.
“That leaves me with virtually no spending money,” she said.
On average, rents for newly let properties are now 3.9% higher than a year ago, Zoopla said.
However, pockets of sharply rising rents remain. Annual rent inflation stood at 10.5% in Northern Ireland, compared to 1.3% in London.
In towns, average rents are rising fastest in Rochdale (up 11.9% year-on-year), Blackburn (up 10%) and Birkenhead (up 9%). Zoopla said tenants were looking for areas in and around major cities.
Owners' concerns
Zoopla tracks rents when homes become vacant and are re-let at open market prices, which represents around a quarter of the rental sector.
The real estate portal forecasts an average rent increase of 4% next year, with demand still exceeding supply.
This increase would come, in part, from the fact that fewer properties would be made available by owners.
The National Residential Landlords Association (NRLA) said 31% of landlords plan to sell the properties they rent in the next two years.
He wants changes to housing taxation and insurance on no-fault eviction rules.
“What tenants need is greater choice. That means encouraging and supporting the vast majority of responsible landlords to stay and continue to provide decent quality housing,” said Ben Beadle, chief executive of the NRLA.
Agents say there are simple ways to make securing a rental property easier, including:
Start your research well before a rental ends and register with multiple agents. Have payslips, an employment reference and a reference from a previous owner to hand in. Build a relationship with agents in the area, but be prepared to broaden your search. Be sure of your budget and calculate. how much you can offer upfrontBe aware that some agents preview properties on social media before listing them
You'll find more advice here and help with your rental rights here.
