UK Rental Market Report - Q4 2022

The key to mitigating rental growth and establishing a more sustainable private rented sector lies in increasing investments in new rental supply from various sources.

Currently, the rental market is grappling with a persistent disparity between supply and demand. The situation is worsened by rising mortgage rates, making it challenging for first-time buyers to access homeownership, thereby driving up demand for rental properties. Rental enquiries per estate agency branch have surged to 46% above the 5-year average.

Although there has been a slight uptick in rental supply in recent weeks due to a weakening sales market, the average number of homes for rent per estate agency branch stands at 10, which is an improvement from a low of 7 recorded at the end of September. However, the overall stock of homes available for rent remains 38% below the 5-year average and 4% lower than November 2021.


  • Rental inflation currently stands at 12.1% per annum, significantly surpassing earnings growth (6%).

  • There are no indications of a slowdown due to the persistently imbalanced supply/demand scenario.

  • Demand remains remarkably high, surpassing the average by 46%, while the total supply of rental properties lags, being 38% lower than average.

  • The largest cities in the UK are witnessing the most rapid rent growth rates.

  • Rental affordability for a single earner has hit its highest point in over a decade, with rental costs consuming 35% of the average weekly earnings.

  • There is a noticeable surge in demand for one-bed flats as renters seek better value.

  • However, stretched rental affordability is expected to impact demand and slow down the pace of rent increases in the first half of 2023.

  • Rent growth is projected to taper off to 4-5% by the end of 2023.

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