(Bloomberg) -- UK private rental inflation picked up for the first time in seven months and hit double digits again in the capital, prolonging a cost-of-living squeeze on tenants.
Rent prices soared 8.7% in October from a year earlier, ending a drift downward in the rate since the spring, the Office for National Statistics said on Wednesday. They rose 0.9% last month alone, the most since February.
In London, they surged 10.4% from year earlier, the fastest increase in the country, after the cost of renting a home jumped 1.2% over the month.
The pickup is a fresh setback for tenants, whose finances are still being squeezed by the housing crisis, even with overall inflation close to the Bank of England’s 2% target. Supply remains severely constrained with 24% fewer rental properties available in September than before the pandemic, according to Zoopla.
The new Labour government has pledged to do more for tenants, many of whom are being forced to rent because they cannot afford a home of their own. But critics say proposals that include banning evictions without cause and tightening green requirements are worsening the problem by prompting many landlords to sell up, further squeezing supply.
Rents in London have surged to an average of £2,172 ($2,750.7) per month, a 26% increase compared to the start of 2022 when costs were fueled by a post-pandemic rush back to cities, according to the ONS data.
“Our members continue to emphasize key concerns regarding the ongoing trend of lack of rental stock versus an ever-growing number of tenants looking for homes,” said Nathan Emerson, chief executive at Propertymark, the trade body for estate agents.
Separately, the ONS said that UK house prices slipped back to an average of 291,828 in September, a 0.3% month-on-month fall. Prices were up 2.9% compared to a year ago.
Headwinds are growing for the housing market as the Bank of England is expected to only slowly cut interest rates.
©2024 Bloomberg L.P.
