Rental unaffordability for single earners has hit the highest level for over a decade, according to Zoopla’s latest Rental Market Report.

The average rent for a new letting has increased by 12% to £117 per month since last year, reaching £1,078pm - and accounting for 35% of the average income of a single earner. This is the highest level in over a decade and is exacerbated by the chronic demand and supply imbalance with the stock of homes for rent down 38% in comparison to the 5-year average and down 4% in comparison to last November.  

In stark comparison, rental enquiries per estate agency branch are 46% above the 5-year average with rental demand being further boosted by rising mortgage rates which is limiting access to homeownership for first-time buyers.  

The gap in rental inflation between new lettings and all privately rented homes is also widening. For the 75% of renters that do not move each year, rental increases are much lower at 3.8% in the year to October 2022 – slower than the growth in average earnings. This gap is why a growing number of renters are renewing their rental properties and staying put to avoid rental increases if they move - however, this trend is compounding the supply problems in the sector.   

Looking ahead to 2023, if rental growth continues at the current rate of 12% - the proportion of earnings needed to pay rent would be stretched even higher to 37%. This is unlikely, however, with the growing unaffordability of renting likely to hit spending power with rental inflation slowing to 5% next year.