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Demand for rental properties in the UK is up 23% in a year as rents hit record highs

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Demand for rental properties across Britain has risen by almost a quarter in a year, research shows, adding further pressure to an oversubscribed market and driving record rents even higher.

According to real estate website RightMove, there has been a 23% increase in inquiries about rental properties around this time last year, with some potential buyers putting their plans on hold in hopes that mortgage rates will fall. New Year.

Landlord fees, in turn, have risen, with average rents reporting a 22% year-on-year increase in the first nine months of this year, according to separate research from London real estate agency Foxton. happened. for a record £571 in one week.

However, the cost and availability of mortgages are starting to stabilize after market turmoil two months after the mini-budget spread catastrophe of the Liz Truss administration, with signs that interest rates could fall further next year.

The two-year average fix has dropped from a peak of 6.65% at the end of October to 6.12% now. Meanwhile, the five-year average fixed rate fell below 6% this week for the first time since the mini budget and now stands at 5.92%, according to MoneyFacts.

RightMove warned that mortgage rates are likely to stagnate at higher levels than buyers have seen in recent years. The Bank of England is expected to raise its key rate to 4.25% next spring, though lower than once feared.

New buyers have been hit hardest by the rise in mortgage rates, especially those who were already financially vulnerable.

Rightmove says the competition for a suitable rental home is probably much tougher and the options are more limited than on the owner-occupied market. The number of smaller rental properties available – studios and one- and two-room homes – is 4% lower than last year, while it is 13% higher in the owner-occupied market.

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Christian Balschen, a real estate expert at Rightmove, said: “It is extremely frustrating for so many people in the rental market, the demand is so high. The number of aspiring starters now having to move to the rental market makes the situation even worse. We see a few more properties coming onto the market, but not nearly enough to meet demand.

Amardeep Lall, Head of Lettings at Manning Staunton, an estate agency based in Leeds and West Yorkshire, said: “Since the onset of the pandemic, the number of tenants looking for a home has far outstripped the number of rental properties available. This means it has become very competitive among renters to secure a viewing and property as there are only a limited number of viewings we can book.

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Until the pandemic, rents closely followed incomes, with rental growth averaging 2.5% per year since 2005 and income growth of 2.4%. In some other cities and towns, including Newbury, Manchester, Cardiff, Edinburgh and Birmingham, advertised rents rose even more than in the capital, according to research published by Rightmove last month.

“The impact of returning to the city post-Covid has been huge,” Foxton said. “While history suggests that the rental market will accommodate income, the underlying balance between supply and demand may be challenged by an influx of foreign students and companies that do not rely on individual income.”

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Source: www.theguardian.com

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