The race for space is becoming one of the pandemic’s defining features. This has pushed up rent prices for larger homes, meaning trading up to gain an extra bedroom or some office space has become challenging. Will rent prices for larger homes go down in 2022? Let’s find out.
[top_pitch]
What are the current average rent prices in the UK?
The Hamptons Monthly Lettings Index shows rental figures for October 2021. It reveals that the average rent price across Great Britain is currently £1,124, up 7.9% on the same time last year. However, London excluded, it drops to £924, up 11% on this time last year.
Here is the breakdown for the different regions:
|
Region |
October 20 |
October 21 |
Year-on-year change (%) |
Year-on-year change (£) |
|
Greater London |
£1,855 |
£1,902 |
2.5% |
£47 |
|
Inner London |
£2,255 |
£2,254 |
-0.1% |
-£1 |
|
Outer London |
£1,779 |
£1,835 |
3.2% |
£56 |
|
South East |
£1,100 |
£1,243 |
13.0% |
£143 |
|
South West |
£889 |
£1,025 |
15.3% |
£136 |
|
East of England |
£1,004 |
£1,107 |
10.3% |
£103 |
|
Midlands |
£719 |
£777 |
8.1% |
£58 |
|
North |
£689 |
£754 |
9.5% |
£65 |
|
Wales |
£683 |
£745 |
9.1% |
£62 |
|
Scotland |
£700 |
£755 |
7.9% |
£55 |
|
Great Britain |
£1,041 |
£1,124 |
7.9% |
£83 |
|
Great Britain (Exc. London) |
£832 |
£924 |
11.0% |
£92 |
It is also worth noting that the current average rent in Great Britain for a one-bed home is £875. The average for a two-bed is £1,019, a three-bed will set you back £1,162 and a four-bed is £1,949.
How much does it cost to trade up currently?
According to the Hamptons Monthly Lettings Index, rent prices for four-bedroom houses have seen the highest increase. Currently, the average rent stands at £1,949 a month, up 10.6% from the same time last year. Surprisingly, this growth rate is almost triple that of a one-bed (3.7%), which currently stands at £875 a month.
As of October 2021, if you want to trade up from a one-bed to a two-bed, you’ll most likely add £144 per month to your rent. Trading up from a two-bed to a three-bed house could cost you an extra £142 a month, but this depends on your particular region.
As expected, London appears to be the costliest area, where a move from a one-bed to two-bed home will add a whooping £567 to your rent per month. And according to the Hamptons Monthly Lettings Index, the cheapest region is North East, where a move from a one-bed to two-bed home will only add £102 to your rent per month.
[middle_pitch]
Will rent prices for larger homes go down in 2022?
As it currently stands, there’s still an imbalance between supply and demand. And if this is not resolved quickly, high rent prices may persist for quite some time.
However, the government and the private sector are currently making moves to increase the supply of lettings. But we can’t expect the imbalance to be corrected overnight, it stands to reason that rent prices should start to fall as more new lettings become available.
Chris Turner, Head of business development for HomeLet and Let Alliance, explains: “There was no specific mention of lettings or the private rented sector in the Budget, which might come as a welcome relief to many landlords, especially given the raft of changes that have impacted them in the past few years.
“The private rented sector provides a home to millions of people across the country. Our view is that the government should give as much consideration to supporting this vital sector as it does to homeownership.”
The hope is that if the government continues to offer significant support to the private rented sector, rent prices may reduce significantly and probably quicker.
