Private tenants are now spending more of their wages on rent than at any other point over the last 10 years.
According to data provided by Zoopla, the average UK tenant is paying 28.3% of their pay, before tax, on their rent alone.
Average rents for new lets have also ,increased, rising 10.4% in a year making it harder for people to afford properties.
Richard Donnell, executive director at Zoopla, said there was signs of financial stress for tenants, particularly those on low incomes.
“Renters continue to face a relentless increase in rents, compounding wider cost of living pressures and making home moving decisions ever more challenging, especially for singles and those on lower incomes,” he said.
Rents have been growing faster than wages in the UK for 21 months, according to the data, with renting in London still by far the most expensive of all regions, at an average of 40% of gross earnings, although this is still below the peak of 43% reached in September 2015.
The property portals says that rental affordability is currently at its worst for a decade in seven of the 12 regions of the UK, with Edinburgh the highest (13.7%) as far as cities are concerned, followed by Manchester (13%), Glasgow (12.3%) and Southampton (10.7%).
Zoopla anticipates rental growth to slow towards 8% by the end of the year, but this is likely to still be above earnings growth.
With the supply-demand imbalance unlikely to narrow anytime soon, rents are expected to continue rising, especially if landlords continue selling up at the existing rate.
Zoopla’s sales data continues to show a steady, constant flow of private landlords selling up – although this has been the case since 2018 and the trend is not accelerating.
The data also shows that due to continued new investment in rented homes through mainly corporate landlords and institutional investors – there has been no change in the number of privately rented homes since 2016
Currently, one in 10 homes for sale on Zoopla are formerly rented out, however, the 20 – 30% of landlords with mortgages are being impacted by higher borrowing costs
These pressures are particularly concentrated in London and the South East which accounts for half – 51% – of landlord sales nationally.
Richard Donnell, executive director at Zoopla, said: “Renters continue to face a relentless increase in rents, compounding wider cost of living pressures and making home moving decisions ever more challenging, especially for singles and those on lower incomes.
“The chronic imbalance between supply and demand continues to push rents higher but we expect increasingly stretched affordability will start to reduce the pace of rental growth into 2024.
“While there is concern over the impact of higher mortgage rates on those with mortgages, renters have already seen a £2,820 a year increase in rental costs over the last 5 years. Some renters are experiencing more stress from higher rents with a jump in those finding the rent difficult to pay.
“A proportion of landlords continue to sell but talk of an exodus is overstated. The real pressure of higher mortgage rates on landlords hits the 20-30% with the highest loan to value mortgages where landlords may need to inject extra capital when they refinance or look to sell. Half of all landlord sales are in London and the South East where yields are lowest and the economics of being a landlord are toughest.”
