Londoners are witnessing the biggest rent increases compared to the pre-pandemic year and averaging 796 pounds per month for a room. Other regions of the United Kingdom are simultaneously facing the hike, reveals SpareRoom data. The room rents in London touched the lowest level during the COVID-19 pandemic in March 2021.
The increase in rents is taking place at such a time when the bills are rising at a rapid speed and the country is set to witness the biggest financial squeeze in more than a half-century period.
The central areas in London are experiencing the biggest room rent change. Data reveals the increase in East Central London and West Central London was up by 26 percent in February 2022 compared to that of February 2021. A 33 percent rise was noticed in the W1 (West End/ Soho) area and 31 percent in the NW8 (St John's Wood) area.
According to SpareRoom director Matt Hutchinson, the city witnessed a fall in room rents by unprecedented amounts during the pandemic period. The demand for rents started increasing in late 2021 and the growth continued at the beginning of 2022. Significant rises in the rents are now being noticed and this may hit the tenants hard.
He further added that the cost of living is rising high and going to become worse in a couple of months from now. This may worry the tenants as making ends meet would become challenging for them amid the high inflation situation in the country.
The supply side is down across the country YOY and by about 32 percent comparing February of both the years. The supply of rooms has declined by 53 percent. It is said about 42 percent of the landlords in the capital have not gained confidence in the rental segment.
Data reveals about 20 percent of the landlords in London are thinking of quitting the rental market while 11 percent are planning to reduce their portfolios.
Considering the entire country, the rents have increased by 4 percent YOY and no drop has been witnessed in any town or city. The biggest increase was in Sunderland and it was about 23 percent. Belfast and Glasgow witnessed a 17 percent up in room rents.
Meanwhile, thehigh and increasing inflation rate in the UK is due to the Russian invasion of Ukraine as the import of oil and gas has been banned from Russia and this has led to an increase in the price of energy. The conflict has entered its second month and no sign of successful peace talks is being seen. Experts believe the prices of necessary items including food may further rise.