UK & Ireland Rent Crisis Shocking 27% Increase Since 2021

Annual Rent for Newly Let UK Homes Increases by £3,240 Since 2021

Since the end of pandemic lockdowns, the average annual cost to rent a new home in the UK has risen by £3,240, reaching £15,240 in 2024—a 27% increase from £12,000 in 2021. This surge has outpaced income growth, which has only seen a 19% rise in the same period. The primary driver of this increase is the high demand for rental properties coupled with a limited supply. In 2024, the rate of rent growth slowed to 3.9%, the slowest in over three years. Regions with already high rental costs, like London, experienced smaller increases (1.3%), while more affordable areas, such as Northern Ireland and the northeast of England, saw more significant rises. Despite the deceleration, rental costs are expected to continue climbing in 2025, especially in more affordable regions. Many private landlords have exited the market due to increased regulations and higher borrowing costs, further tightening the supply. Expanding housing construction is suggested as a solution to alleviate market pressures.

Rents Projected to Rise by Nearly 18% Over Next Five Years, Warns Savills

Estate agent Savills forecasts that UK rents will increase by almost 18% by 2029. This projection is based on a shortage of new buy-to-let landlords and an insufficient supply of rental properties. The anticipated rent growth is expected to outpace the projected 15% increase in average wages during the same period. In London, where rents are already high, tenants currently spend nearly half of their income on rent. This trend raises concerns among renters, especially with rising utility costs. The primary issue is the UK’s failure to build enough homes to meet the demands of a growing population. Rental properties are being leased faster now than before the pandemic, indicating a persistent imbalance between supply and demand. Upcoming government changes to energy performance certificate requirements for rentals may prompt more landlords to sell their properties rather than upgrade them, potentially worsening the rental supply issue and leading to even higher rent increases than currently forecasted.

Scottish Rent Controls Spark Tensions as Developers Seek ‘Assurances’

The Scottish government is proposing a housing bill to address rent control amid Scotland’s housing crisis, which is causing tensions with developers and property investors. The bill aims to limit rent increases to the rate of inflation plus 1% to 6%, balancing tenant protection and encouraging new housing development. This move follows a previous rent freeze and cap set in 2022. Developers and investors are seeking legislative clarity and assurance to rebuild trust and avoid market withdrawal. The Scottish Greens criticize the bill for potentially favoring landlords and advocate for more affordable housing and retrofitting existing properties. Despite Scotland’s strict rent controls, leasing costs have risen above the UK average, emphasizing the need for increased housing supply. The government is also investing in housing planning to expedite new home deliveries, as recent data shows a decline in new home completions and applications. Expanding the social housing supply is deemed crucial to resolving the crisis.

Landlords Selling Properties Contribute to Rising Rents in Ireland

A significant number of landlords in Ireland are selling their rental properties, leading to increased rents nationwide. Recent research indicates that one in every four property sales this year involves a landlord exiting the market. This trend is contributing to higher average rents, which are approaching €2,000 per month across the country. In Dublin, average rents have surpassed €2,000, with south county Dublin experiencing averages above €2,600. Property experts are calling for tax system reforms to encourage landlords to remain in the market, aiming to stabilize rental prices and address the housing shortage.

Fine Gael Proposes Increased Rent Tax Credits for Irish Renters

Fine Gael has announced plans to increase the rent tax credit by €500 per renter, resulting in €1,500 for individual renters and €3,000 for couples. This initiative aims to alleviate rental costs and assist tenants with their expenses. The party also plans to invest €10 billion of Apple tax funds into housing and develop a better system for both renters and landlords. Their commitment includes delivering 303,000 homes over six years, building homes outside major cities, and increasing Help to Buy Relief for first-time buyers. Additionally, Fine Gael aims to address homelessness by constructing 12,000 social homes per year and focusing on securing private tenancies.