Landlords worry as rents hit a new record across the UK

Landlords worry as rents hit a new record across the UK

0:01 AM, 9th December 2022, About 2 months ago 4

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Rents across the UK continue to hit new highs with the HomeLet Rental Index revealing that tenants are now paying, on average, £1,175 per month for a new tenancy.

That’s a rise of 0.3% from October‘s figure – and it is up 11.1% from 12 months ago.

But it appears that landlords are becoming increasingly worried about a tenant’s ability to pay rent as the cost-of-living crisis continues.

The data reveals that every UK region is seeing annual growth but for tenants in London, they have seen rents rise by 1.1% to reach an average price of £2,011.

Average rent is 9.9% higher than last year

However, excluding London, the average rent is 9.9% higher than last year, and 0.1% higher than in October – with rents now at £977.

When analysed, HomeLet says that landlords in the North West have seen the highest monthly growth at 1.2%, with an average rent of £871.

Andy Halstead, the chief executive of HomeLet and Let Alliance, said: “The end of 2022 is almost upon us, and the story of the year is one of rapid growth in UK rent prices.

“In January 2022, the UK’s average rent was £1,064; by November 2022, it had risen to £1,175, a 10% increase in less than a year.”

‘Concerned about the ability of tenants to pay their rent’

He added: “Our message has been consistent throughout this time. Landlords are concerned about the ability of tenants to pay their rent and potential new legislation, which has contributed to a shortage of available rental properties.

“This lack of supply to meet the demand is sure to see prices continue to rise at a time when the cost-of-living crisis is making things difficult for many people on all fronts.

“We will likely see a challenging year for the private rental sector in 2023.”

‘Ability of tenants to pay rent is their biggest concern’

He continued: “In a recent survey of landlords from HomeLet with Dataloft, four out of 10 landlords (40%) named the cost-of-living crisis and its effect on the ability of tenants to pay rent as their biggest concern over the next 12 months.

“The concerns appear to be well founded, as a concurrent survey of 12,000 tenants revealed that just one in ten (11%) think the cost-of-living crisis will not impact their ability to pay rent.”



Comments

Helen Smitj

11:42 AM, 9th December 2022, About 2 months ago

National average rents are so misleading! They imply that all landlords are racking in this amount minimum per property. Average rent should be calculated per county or borough this would give a fairer view of rents charged. But obviously this wouldn’t give sensational headlines for the press. My average is way below these figures.

northern landlord

12:31 PM, 9th December 2022, About 2 months ago

A simplistic answer for landlords here is that if you are worried about your tenants ability to pay the rent don’t put it up. However, the fact that average rents are up by only 9.9% on last year’s levels means the rent rises are actually below inflation so you could argue landlords are actually doing their bit.

While there is lots of fuss about evil landlords pushing up rents what about building societies? With an average mortgage of £200,000 the repayment level was around £847 month at 2% once fixed terms end this repayment would increase to £1055 month at 4% an increase of nearly 25%! Yet nobody is demonising building societies or banks with anywhere near the same venom as that reserved for landlords. Of course you have to be careful with averages as an average figure could be one that nobody actually pays. I wish my tenants were all paying rent at the “average level” of £1,175, at that level I would be happy to freeze their rents for 10 years! If you read this take a look at “Why should landlords deal with lies and damned statistics?” in this same issue.

Contended Ted

18:31 PM, 9th December 2022, About 2 months ago

Reply to the comment left by northern landlord at 09/12/2022 - 12:31I too am surprised by these rents. With two new tenants I pushed the boat out to £650 and £695. Both properties are worth less than £140k, so an okay return given that both have variable mortgages, while I consider my options. I know a lot of experienced landlords have concerns and are watching for signs of how the land lies. I am not too swayed by forecasts. I prefer to watch what happens to my little corner of the market.

Paul Essex

12:34 PM, 11th December 2022, About 2 months ago

There are many of us in the south east who are equally surprised that you can still get a 140k house. Small Town houses here start at around 240 and in hot spots like Cambridge a one bed terraced house is 320k! The era of sub 800 rents is almost over here.

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