The annual rate of UK rental growth is +2.0%, up from 1.3% a year ago as rental growth increases on tightening supply as levels of new investment decline.
Rents are rising at their fastest pace for 3 years, but this growth is half the level of earnings growth (+4.0% ONS), continuing a 3-year trend.
A single earner spends 31.8% of earnings on rent for the typical rented property. This measure of affordability varies widely across regions and cities. In markets with high rents, increased levels of sharing improve affordability levels.
Rental affordability has remained broadly stable over the last decade and has been trending downwards over the last 3 years.
Rental growth across UK cities ranges from 5.4% in Nottingham to -4.1% in Aberdeen where the fall in the oil price has adversely impacted demand.
In broad terms, markets where rental supply is static or falling are registering an above average growth in rents. Rental growth is slower in markets where rental supply is rising through new investment or renters existing the market to purchase their first property.
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