Tenants in Britain last month were hit by the highest increase in rents for any November in at least a decade.
Rents on new tenancies rose 10.2% year-on-year, according to the estate agent Hamptons, which is the strongest growth recorded in any November since its records began in 2014.
This increase means people paid a record £85bn in rent this year, Hamptons estimates.
Its latest monthly lettings index shows that the total rent bill has doubled since 2010, when tenants stumped up just over £40bn, as high house prices and mortgage costs made it harder for younger adults to buy a home.
The increase over the last 13 years is driven by a 25% increase in the number of households renting, as well as the rise in rents, Hamptons says.
Overall, the average rent on a newly let home in Great Britain rose to £1,348 pcm in November, up 10.2% or £125 pcm on the same month last year. That is the seventh double-digit increase in the last 12 months, as well as the highest November increase since at least 2013.
Rents rose fastest in inner London, where the average monthly cost of newly let properties has climbed by 13.2% over the last year to reach £3,174 a month.
They rose slowest in the south-west of England, increasing by 5.1% to £1,162 a month on average for a newly rented home.
“Tenants across Great Britain paid a record £85.6bn in rent in 2023, equivalent to the total value of all homes sold in London last year,” said Aneisha Beveridge, the head of research at Hamptons.
“While over the last 12 months the rent bill has increased because of record-breaking rental growth, longer term it’s mostly risen as a result of more households renting,” she added.
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Higher interest rates mean more millennials are renting for longer, rather than moving on to the housing ladder. “This is why the millennial rent bill has risen over the last few years, at a time when it might have been expected to fall,” Beveridge said. “With the rate at which millennials climb on to the housing ladder slowing, they’re starting their own families and renting larger, more expensive homes which is pushing up the amount of rent they pay.”
High interest rates are also pushing house prices lower. Rightmove reported on Monday that the average asking price of a home coming to market fell by 1.9%, or nearly £7,000, in December to £355,177.
But an era of higher rates will probably mean that more millennials will be renting for the rest of their lives, Beveridge predicts.
A shortage of rental properties has also pushed up prices, as tenants have competed for fewer available homes to rent. Data last month showed that more buy-to-let landlords have been selling up, with rising interest rates meaning some landlords losing money when they remortgage.
