Our Blog

Rents Reach Record Highs Posted: 25th July 2022
img

Could a rental property generate a good return on your investment?

The latest figures show that across the rental market, tenants will have spent more than £63 billion in 2022 due to strong rental growth and new tenants joining the market. This means that tenants will have spent 2% more this year compared to 2021.

Due to rising rents, the rent paid by tenants as more than doubled since 2008 and this year’s figure will have exceeded the previous record set in 2017 when tenants paid £750m less in rent. In addition, there are more than £275,000 fewer private tenants than there were in 2017.

There has been a distinct shift in the rental market over the last decade, as rents for Generation Z (those born between 1997 and 2012) are projected to rise ten-fold compared to three years ago. Renters from Generation Z are expected to pay a fifth of all rents, amounting to £11.7bn, during the rest of this year which is more than three-fold year on year.

Millennials, those born between 1981-1996 paid 49% as much rent as they did in 2017 as more people in this generation bought rather than rented properties.  However, they are still expected to pay more rent than any other generation at £22.4nb which is an 18% rise on last year.

The average rent went up by 8.8% over the last year which is a slowdown in growth compared to 11.5% in May. The national average rent is currently £1,163 which is a rise from £1,069 one year ago.

Rents in London grew faster than anywhere else in the country, going up by 12.1% over the last year taking the average rent above £2,000 for the first time.

Millennials are still forecast to pay more rent than any other generation this year at £22.4bn, an 18% fall on last year, followed by Generation X (born between 1965 to 1980) who are projected to pay 19.6bn, a 5% decline on 2021.

Why are rents rising?

The rise in rents seems to be a result of the lack of homes available to rent and landlords passing on higher running costs and rising mortgage rates to their tenants. Insurance premiums and maintenance costs are higher and so landlords are looking to recoup these costs where they can.

For many renters, the cost of living, rising mortgage rates and rising inflation has put on hold any plans of home ownership. In addition, mortgage affordability is a barrier for many – something the government is looking to address.


Whatever your reason for moving; whether it's for extra space, to downsize or you may simply have found your dream home, Nicol can help. Our knowledge of the local property market helps us develop a marketing plan that's right for you and your property.
We want our clients to be delighted with the service we provide. Listening to your needs and understanding your requirements is our starting point. To find out more about our approach to selling homes, download our comprehensive Guide to Selling your Property here.
If you are planning on selling your home, contact Nicol Estate Agents today for an appraisal of your property. Our Managing Director Douglas Nicol and Sales Manager Daniel Cohen carry out hundreds of market appraisals every year, giving them an intimate and unparalleled knowledge of the property market in Glasgow, from city centre apartments to family homes and building plots. We will talk to you about the property market in your area, compare sales evidence, local demand for similar properties, outline our tailored marketing plan and provide details of our sales support strategy right through to completion.