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The average UK rent for new lets has experienced a notable increase, reaching £1,220, marking an 8.3% rise compared to the previous year. This translates to an additional expense of £1,100 annually (or £90 monthly) for UK renters in comparison to the preceding year. Although the inflation rate has surged, it's lower than any recorded rate over the past two years, indicating a deceleration in rental growth.

Regional Variances in Rental Prices:

The rental landscape varies across regions, with London commanding the highest average monthly rent at £2,119, followed by the North East at £695. Rental growth has tapered across all regions except the North East, where it surged by 9.3% in the last year. Noteworthy increases have been observed in areas like the South East, East of England, and Wales, each experiencing rises of £110, £100, and £80 respectively.

Scottish Rental Inflation and Rent Controls:

Scotland stands out with the highest level of annual rental inflation in the UK, attributable in part to rent controls implemented by the Scottish Parliament in September 2022. The average monthly rent in Scotland has climbed to £790, reflecting an £82 increase from the previous year. Despite a slower growth rate compared to previous peaks, Scotland is anticipated to maintain a brisk pace of rental growth in 2024.

Factors Influencing Rental Prices:

Several factors influence rental prices, including demand-supply dynamics, earnings growth, and mortgage rates. A persistent imbalance between supply and demand has been a key driver of rental inflation in the UK rental market over the past three years. Additionally, the impact of higher mortgage rates has contributed to increased demand for rental properties.

Mitigating the Impact of Higher Rents:

To cope with escalating rents, some renters are opting to remain in their existing homes, while others are downsizing or relocating to more affordable areas. House-sharing has also emerged as a strategy to mitigate rising housing costs, albeit at the expense of privacy and space.

Outlook for the Rental Market:

The rental market appears to have surpassed its peak growth phase, with indications of a slowdown in rental growth anticipated for 2024. Affordability constraints are expected to temper demand while the supply gradually improves. This deceleration in rental increases will likely be welcomed by renters who have grappled with steep hikes in recent years.