Rising rents and utility bills have fueled interest in smaller and cheaper rental properties at the expense of larger and more expensive homes in the UK, according to research from property portal Zoopla.
The data, published on Tuesday, showed that 35.4 percent of inquiries for real estate agents about properties in July and August this year were about two-bedroom apartments, up from 29.8 percent in 2020.
In the same two months, inquiries about three-bedroom homes were 12.1 percent, down from 15.9 percent in 2020.
These figures come amid growing criticism of the state of the housing sector, with Rising rents Leaving more tenants at risk of eviction due to the cost of living crisis.
Richard Donnell, chief executive officer of research at Zoopla, said rents have “picked up forward” over the past year, although there are signs that the pace of growth has been peaking.
“Tenants are responding and are looking for smaller, better value-for-rent homes with an emphasis on energy costs as much as rental levels,” he said.
The amount of gas required, on average, to heat a purpose-built two-bedroom apartment for a year is 40 percent less than a house with terraces, Zobla said. The fixed transfer figure was 25 percent lower.
In July and August, the number of properties available for rent was 46 percent below the five-year average, while the number of inquiries about properties was more than double the five-year average.
The imbalance helped push the rate of rent increases to an annual rate of 12.3 percent for the year ending in July, according to Zobla. The corresponding figure the previous year was just 2 per cent.
Donnell said the rental market needs more new homes for rent to counteract upward pressure on prices, adding: “Larger legislation has seen fewer new investments and a small but growing number of landlords selling, which means the rental market has stopped growing since 2016.”
Zoopla said average rents for everyone Properties It is up by £115 from last year’s average level of £1,051 a month. She added that this figure represented 34.4 percent of the average individual renter’s income.
The hikes were particularly sharp in the largest urban areas. On average, rents in London rose 17.8 per cent in the year to July. In the same period, they increased by 15.5 per cent in Manchester and 14.4 per cent in Glasgow.
Growth was slowest in north-east England, where the rise was 7.6 per cent.
However, Zoopla expects rental growth to slow from its current levels in the last quarter of 2022 and next year.
her search is Latest evidence From the rapid rise in housing costs in the UK due to the mismatch between supply and demand. Many buy-to-let property owners have sold properties since the onset of the coronavirus pandemic to reduce their exposure to the sector.
There have also been indications that landlords are selling properties to avoid increasingly stringent regulations. These measures include a plan, announced last week By the Scottish Government, to freeze rents in both the private and social rental housing markets.
Donnell said there was a risk that further regulation to improve standards or curb rent growth could exacerbate the supply problem.
“Policy makers must walk a delicate path between protecting consumers and ensuring a decent supply of homes for rent,” he said.
Across the country, private renters are struggling with “increasingly unaffordable” private rents, said Polly Nate, chief executive of homelessness charity Shelter.
“The lack of affordable homes means that competition for new rents is fierce,” Nate said. “No wonder tenants are being turned away from their local area or forced into cramped one-bedroom apartments just to find a new home.”