Rents predicted to rocket by 12.9% in 2023

Rents predicted to rocket by 12.9% in 2023

11:11 AM, 3rd January 2023, About A year ago 5

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Not only will demand for rental property in the UK remain high in 2023 – but rents will rocket by 12.9%, one finance firm predicts.

That’s the view of Finanze who say that demand for accommodation from employees, young cohabiting couples with children and students will continue through the year.

And, as a result, Finanze is predicting that rents will rise across the UK by 12.9%.

‘Expecting a period of recovery’

Joshua Ellard, the firm’s head of specialist finance and research, said: “This time last year, many would have been expecting a period of recovery in which the economy could thrive and recover from the global pandemic.

“In reality 2022 has thrown everything at us, from both economic and political perspectives.”

In its annual research report, the firm says that the Bank of England’s base rate will rise to 5% – until inflation is firmly under control.

Taking a bleak view on house prices

Finanze is also taking a bleak view on house prices and state they will fall by 10.98% in the UK this year. In London, the report says that the capital’s house prices will drop by 15.4%.

Its research points to the cost-of-living crisis, increasing mortgage rates and growing uncertainty among prospective buyers for halting their buying plans for pushing prices down.

The firm is also predicting that inflation for the last quarter of 2023 will be around 4.5%, before settling at a ‘new normal’ of 3% in late 2024.

The UK’s GDP is also expected to remain relatively flat and will decrease by around 0.5% over the year before there is a return to a period of economic growth in 2024.

‘Increasing barriers to getting on the property ladder’

Mr Ellard says: “The increasing barriers to getting on the property ladder will force many to continue to rent.

“Fundamental economics tells us that when the demand for rentals outweighs supply, rental costs will only increase.”

The annual report highlights that while rents in the UK will rise by 12.9% – or 10.14% when London is excluded – there is bad news for renters in the capital.

That’s because the figures from Finanze show that rents in London will rise by 15.8% in 2023.


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Comments

moneymanager

11:42 AM, 3rd January 2023, About A year ago

"The UK’s GDP is also expected to remain relatively flat and will decrease by around 0.5% over the year before there is a return to a period of economic growth in 2024."

No one eats GDP, our real earnings are GNI, it;s the difference esseentially between turnover and profit.

My concern is that with the global supply chain malfunction (destruction) by the insanity of the "Covid Pandemic" we are being propelled to a complete meltdown.

As Ian Flemming wrote in Goldfinger
"once is happenstance, twice is a coincidence and three times is enemy action".

We are well beyonf three.

Pete England - PaTMa Property Management

14:10 PM, 3rd January 2023, About A year ago

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/november2022

Private rental prices paid by tenants in the UK rose by 4.0% in the 12 months to November 2022, up from 3.8% in the 12 months to October 2022.

Annual private rental prices increased by 3.9% in England, 3.1% in Wales and 4.4% in Scotland in the 12 months to November 2022.

The East Midlands saw the highest annual percentage change in private rental prices (5.1%), while London and the North East saw the lowest (3.5%).

northern landlord

17:15 PM, 3rd January 2023, About A year ago

Pete England is right. Rent rises for existing tenants have been low and many in fact have rents below current market rates. Contrary to popular belief many landlords do not hike rents for the sake of it However, when a property is vacant a landlord would be daft to not ask for full market rent . It is these new rents where the rises will be seen

Arthur Cotton

23:13 PM, 3rd January 2023, About A year ago

And thats why key workers ate striking. Because wages don't cover housing costs.

Roberta Goodall

2:01 AM, 8th January 2023, About A year ago

Reply to the comment left by northern landlord at 03/01/2023 - 17:15
I spoke to my rental agent yesterday about the rent to market a house for. She cautioned about asking too much saying that rents have fallen back in Scotland due to cost of living crisis. I had 17 families wanting my property just over a year ago, but a similar property has been offered for rent for over three months because the landlord is expecting what he could get then and won't accept reality. I had my property up for sale, accepted offer then Nicola put tax up to 6% and the next day the sale fell through. C'est la vie, back to what I know, renting!

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