Rents hit new record-breaking high

Rents hit new record-breaking high

0:01 AM, 18th September 2023, About 8 months ago 15

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The average rent in Great Britain has now passed £1,300 for the first time in a decade, according to new data.

Hamptons say renters face having to fork out more than £1,000 in some areas in England whilst renters in Inner London see rents soar past £3,000.

Rents in London have been rising at a double-digit pace in 16 of the last 18 months, costing the average tenant an extra £5,508 each year compared to March last year.

Many mortgaged landlords are being squeezed

Aneisha Beveridge, head of research at Hamptons, said landlords are not entering the market due to high mortgage costs.

“Each passing month has ushered in a new rental market record.  Rents have risen more in the last 12 months than they did between 2015 and 2019.

“While the current pace of rental growth is unsustainable long term, many mortgaged landlords are being squeezed just as tightly as tenants.

“Higher rents are only going some way towards helping mortgaged landlords’ balance their books, rather than boosting their profit.  This is one of the reasons we haven’t seen large numbers of new landlord’s come into the market.”

Record breaking rents in Scotland

Rents on newly let properties rose by a record-breaking 13.4% in Scotland in August, the largest increase in more than a decade.

For the first time last month, rents in Scotland were higher than in the Midlands despite the Scottish government introducing rent controls.

Monthly rents in Scotland reached a staggering £935 compared to an average of £922 across the East Midlands.

There are signs, that some of the upward pressure on rental growth may ease.  The number of rental homes on the market carried on rising during August, up 30% on last year’s record low, a sign that homes are sitting on the market slightly longer than last year.

However, the number of rental homes available remains 39% below 2019 levels despite a similar number of tenants looking to move.

Higher mortgage rates continue to buffer the market

Ms Beveridge says high mortgage rates continue to affect the market.

“The fallout from higher mortgage rates continues to buffer the rental market.  Higher interest rates have encouraged some leveraged landlords to conserve cash and invest beyond bricks and mortar.

“With the Bank of England raising rates to encourage debt repayment instead of additional borrowing, the 30,000+ fall in the number of outstanding UK buy-to-let mortgages since November shows landlords are playing ball.

“However, it’s a mixed blessing for tenants. With most mortgages repaid by the sale of the home, renters are being short-changed and this is adding fuel to the rental market.”


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Comments

Teessider

9:32 AM, 18th September 2023, About 8 months ago

Another missed opportunity for the Renters (Reform) Bill.

The RRB proposes to abolish fixed term tenancies, making all tenancies periodic from the start.

How much better it would be to increase the minimum length of a fixed term. Why not make it ten years? Or more? This would have nearly the same effect as abolishing Section 21 and provides the tenant with better security of tenure. Also, make the notice period for Section 21 longer. Perhaps a year, maybe two years?

Dylan Morris

10:43 AM, 18th September 2023, About 8 months ago

Reply to the comment left by Teessider at 18/09/2023 - 09:32
So a landlord couldn’t sell for ten years or more. Yep this is sure going to help the rental sector. Excellent idea got any more ?

Stella

10:45 AM, 18th September 2023, About 8 months ago

Reply to the comment left by Teessider at 18/09/2023 - 09:32
I dont like the idea of 10 year tenancies.
You could have the tenant from hell for 10 years and I am not keen on 2 year notice periods either. Tenants could do a lot of damage in 2 years.
Not to mention the hard work and money invested in these rental properties, mortgages to be paid, maintenance etc.
To have a property tied up for 10 years would be a disaster .Why not be fair to everyone and keep section 21 and perhaps increase the fixed term to say one or two years but not to10 years!!

Teessider

10:49 AM, 18th September 2023, About 8 months ago

Reply to the comment left by Dylan Morris at 18/09/2023 - 10:43
Selling could be a new ground for Section 8 but it should have a longer notice period than the current two months. A year or two would be more reasonable if tenants need to find new schools for their kids or new jobs for themselves.

Teessider

10:58 AM, 18th September 2023, About 8 months ago

Reply to the comment left by Stella at 18/09/2023 - 10:45
Tenants from hell could still be evicted via Section 8. They could cause as much damage in a day as they can in 2 years.

Tenants should know how long they have in a property before they sign the AST. The tax system could be used to encourage longer fixed terms.

Dylan Morris

11:05 AM, 18th September 2023, About 8 months ago

Reply to the comment left by Teessider at 18/09/2023 - 10:58Evicting tenants from hell requires statements from neighbours (unlikely as fear of retaliation) and police reports, council reports etc. All sounds easy but in practice a complete nightmare. And then you get a lefty judge who feels sorry for them and doesn’t want to put them out on the street. The Government say they’re going to make it easier in these situations, but say absolutely nothing as to how.

Luke P

12:31 PM, 18th September 2023, About 8 months ago

Reply to the comment left by Teessider at 18/09/2023 - 10:49
Absolutely not! Especially not retro-active. You're thinking one-dimensionally as though every exiting LL just gently winds down. Some get terminal illnesses and wanna cash out in less time that two sodding years. Others move overseas and need to deal with their tax affairs efficiently, which they should be entitled to do so.

The PRS is, should be and always was an additional, optional service and isn't there to prop-up the Govt's lack of planning.

Beaver

13:13 PM, 18th September 2023, About 8 months ago

So "Rents on newly let properties rose by a record-breaking 13.4% in Scotland in August, the largest increase in more than a decade."

In the run up to the next election the labour party badly needs to learn from the failed SNP experiment in Scotland.

Teessider

14:35 PM, 18th September 2023, About 8 months ago

You say…

“The average rent in Great Britain has now passed £1,300 for the first time in a decade, according to new data.”

Does that mean rents were higher 11 years ago? I doubt it.

Rents are likely to always hit new highs. That’s how inflation works.

Beaver

15:48 PM, 18th September 2023, About 8 months ago

Reply to the comment left by Teessider at 18/09/2023 - 14:35
They will be higher in Scotland *because* the SNP has tried to limit rent increases. And all the other parties need to learn from that mistake.

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