Rents in Britain are at their highest level ever as interest rates rise, driving away potential buyers.
According to Hamptons, the average monthly rental cost is 12 percent higher than it was at this time last. It has risen by £140, to £1,300, for the first.
Rightmove, a property website, has conducted a separate study that suggests more than one-third of the homes listed for sale had their price tags reduced in an effort to increase demand.
Aneisha B. Beveridge, Hamptons’ head of research, stated that “each month brings a new record in the rental market”. Rents rose more over the past 12 months than between 2015 and 2019
Hamptons data shows that rents in the UK have risen by 29 percent or almost £300 per month since the start of the pandemic. This is due to a persistent imbalance between the supply and demand of rental homes.
Rents in London have risen by 17.1 percent in the last year. Rents in Scotland are up by 13.4% year-on-year. This means that it’s now more expensive to rent an apartment north of the border. Wales has seen the slowest rent growth with only a 3.4% increase.
Rising mortgage rates have boosted demand, as they’ve stopped potential buyers from climbing the property ladder. Migration levels are also at a record high. Developers say that the complex planning system prevents them from building as many houses as they want. It has also been suggested that small landlords are selling their properties because of rising mortgage rates and changes in regulations.
Beveridge stated that many mortgaged landlords were being squeezed as hard as tenants. Rent increases are only helping mortgaged owners balance their books and not boosting their profits. This is why we haven’t had many new landlords enter the market.
Landlords who want to sell their properties also have a tough time. Rightmove data shows that price reductions are at a level last seen in 2011. This means that 36,3% of all houses and flats on the market had at least one reduction since they were listed. The average asking price of homes with a reduction is 6.2 percent, or £22,700.
Andy McHugo is an estate agent from Birmingham. He said, “In my almost twenty years selling homes, I feel this summer and last have been the subdued.”
Rightmove typically sees a rise in the asking price in September, as the second busiest season of the year begins. The average asking price has only increased by 0.4% over the last month to £366,281.