Rental prices could increase by almost 20% over the next 12 months, putting the country in a cost of renting crisis, warns one lettings boss.

Tenant referencing firm HomeLet reports that UK rents have risen by 1.6% in one month, the fourth consecutive increase, with rental prices in London up by a staggering 3.1%, the equivalent of £65pcm extra compared to March.

Its Rental Index reveals that all but the East Midlands reported rises this month, with price hikes ranging between 0.4% in the South West and up to 2.9% in the North East. The increases mean UK renters can now expect to pay a third of their wages (33.3%) in rent, with Londoners paying out nearly two-fifths of theirs (39.1%).

Across the country, rent has increased by 7.9% during the past year, and by 35.8% since pre-pandemic rates in January 2020, when the average monthly rent was £953pcm.

Trajectory

HomeLet and Let Alliance CEO Andy Halstead (pictured) believes a trajectory like this could see rental prices increase by almost 20% over the next 12 months, which would be the equivalent of more than £250 more being paid out each month by the average UK tenant.

“This puts the country in a clear ‘cost of renting crisis’ and the government must act to provide landlords and tenants with the clarity they so desperately need,” he says.

"The Renters Reform Bill’s slow progress through Parliament only serves to prolong the current chaos, adds Halstead, who points to figures from HMRC that show 139,000 taxpayers reported 151,000 disposals of residential property in the 2022/23 tax year, which has reduced the available rental stock and driven up rents as more renters compete for fewer properties.

“Until a clear date for the abolition of Section 21 notices is confirmed, many more landlords are likely to lose patience and sell up altogether. This will only inflate rental prices further.”