Rental prices continue to rise in the UK as interest rate hikes price buyers out of mortgages and the cost of living squeeze tightens. But, where are UK's cheapest rental homes? Yahoo Finance investigates.
According to data from the Office of National Statistics (ONS), rental prices for tenants in the UK rose by 4.2% in the 12 months to December 2022. This was up from 4.0% in the 12 months to November 2022.
This represents "the largest annual percentage change since this UK series began in January 2016," the ONS said.
But where are UK's cheapest rental homes?
The median monthly rent in England is £795, with the North East having the lowest recorded prices, according to the ONS.
Property advice platform Move IQ, found that the cheapest place to rent in England was in Shildon, County Durham, coming in at an average £376 per calendar month (pcm).
Within the London area, Bexley was the cheapest place to rent a one-bedroom flat, costing on average £966 pcm, according to Move IQ.
Motherwell was the cheapest place to rent in Scotland, at an average £714.32 pcm, followed by Dumfries and Galloway at £775, and Kilmarnock and Ayr £807.40, according to Rightmove,
In Wales, the cheapest rental prices were on the island of Anglesey, in the town of Garreglwyd in Benllech. An unfurnished one-bedroom flat in Garreglwyd was available for £395pcm, according to The Daily Post.
As interest rates rise and the demand for purchasing property in the UK falls, UK rental prices have increased by over 4% in the past year, and as much as 16.7% since January 2015.
Rents increased across all regions of the UK in 2022, including London. Annual private rental prices increased by 4.1% in England, 3.5% in Wales and 4.4% in Scotland in the 12 months to December 2022.
Northern Ireland saw the biggest rise at 9.6%.
Within England, the East Midlands saw the highest annual hike in rents, rising by 5% in the 12 months to December 2022, while the North East and the South East saw the lowest increase, at 3.8%.
Rental prices in London were up by 4.0%. This was the strongest annual percentage change in London since November 2015.
The Royal Institution of Chartered Surveyors (RICS) reported in their UK Residential Market Survey that tenant demand continues to rise in the UK, while the flow of fresh supply becoming available on the rental market continues to dwindle.
In separate figures, the ONS said property prices increased by 10.3% in the year to November, slowing from 12.4% in October 2022.
The slow down in the property market was due to an increase in interest rates pricing many out of obtaining a mortgage.
According to a report by the BBC, the typical UK house price by November 2022 was £295,000, which was £28,000 higher than a year earlier.
Myron Jobson, senior personal finance analyst at Interactive Investor, told the BBC: "Home prices have risen far more quickly than incomes, creating an affordability squeeze, and mortgage rates have risen to levels not seen since the financial crash."