More than one in seven private tenants are “overpaying” to secure a rental property, often because they are desperate or there is nothing else available, research suggests.
Average UK rents have increased for the sixth quarter in a row as shortages of available properties continue to drive up costs, according to the Deposit Protection Service (DPS), a government-authorised scheme that keeps tenants’ deposits safe.
It found that the typical rent paid in the first three months of this year was 6.1% higher than 12 months earlier and stood at £849 a month – up from £800.
It added that for the first time since the start of the coronavirus pandemic, flats were the property type showing the biggest rise in rents, which it said “could signal the beginning of the end of the pandemic trend of renters leaving cities”.
The report is the latest in a line of surveys showing that intense competition in the rental market is adding to the financial strain being felt by many households. Earlier this month the property website Rightmove said private rents were rising at a record rate, and prospective tenants outnumbered available rental properties by more than three to one.
The DPS – which says its database of private rental prices is the largest of its kind – said a survey of tenants it carried out earlier this year found that 15% of respondents said they had paid more than the advertised rent to secure their property.
Of those, more than two in five (43%) said they had paid over the odds because they were “desperate to secure a property”, while 26% said there was nothing else on the market. A further 11% said the agent had asked them for their “best offer”, another 11% said they overpaid because they loved the property, and the remaining 9% did not give a reason for overpaying.
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The DPS said across the UK the picture was one of strong rental growth, with an increase in average rents in all regions between the first quarter of last year and the same period this year. Ten of the 12 UK regions experienced increases of more than 4%, with the West Midlands topping the table at almost 8%.
Matt Trevett, the managing director at the DPS, said: “Consistent quarterly rent rises – coupled with survey results that suggest that a proportion of tenants are overpaying to secure a property – underline the current intense demand for, and tight supply of, rental homes in the UK.”
Rents in London – which fell out of favour with many tenants during the first year of the pandemic – were also rebounding strongly, he added, with the average monthly cost of a flat in the capital increasing by £111, or almost 9%, in the space of a year to reach £1,416.
