Leicester, May 09, 2022 (GLOBE NEWSWIRE) — Monthly rents have been accelerating for some time in key areas of the country, due to the growing mismatch between available inventory and tenant demand. As things stand, the UK private rental market is more competitive (and potentially profitable for landlords) than at any time since records began.
UK Property Finance reports that the new average monthly rent of £1,088 outside London represents an annual increase of more than £100 in the first quarter from the previous £982. This equates to an average increase of 10.8% in asking rents – the first time that average annual rent growth has exceeded 10%.
Average asking prices in London were up 14.3% compared to the same period last year, when the average rent price per calendar month was £1,919.
“Living in the UK is not getting any cheaper as the cost of living increasingly weighs on household budgets across the country. But soaring inflation and unprecedented energy bills are not the only financial headaches the British public is forced to deal with. According to the latest figures from Rightmove, average monthly rents in the UK private rental market have reached a record high of £1,088. For private tenants in London, it now costs an average of £2,193 per calendar month to rent a house. – UK property finance
Commenting on the figures, Rightmove property data director Tim Bannister said that at no time since records began has the market been so competitive.
“During the first three months of this year, we have seen tenant demand exceed the high levels set last year, which, together with the reduced number of units available to rent, has resulted in the most competitive rental market. that we have ever recorded”, – Tim Banister, Rightmove.
Demand continues to outstrip supply
Rightmove also revealed that the number of tenants inquiring about rental properties is currently 300% higher than the actual number of properties available. This gives landlords the opportunity to choose between several potential tenants for most of their properties, often signing contracts with the highest bidders.
The number of rental properties listed as available rose 5% in March, but there are still 50% fewer properties available on the market today than there were at the same time last year.
Following a temporary lull in popularity attributed to the coronavirus pandemic, demand for rental accommodation in London has increased by more than 80% compared to 2019. In the capital, the number of rental accommodation available has fallen by around 47% during the same period.
Outside of London, demand for quality rental properties is particularly strong in Liverpool and Manchester, leading to average annual monthly rent increases of 17.1% and 19.3% respectively.
Mortgage providers expect more defaults as cost of living rises
“Those who already own their own home in the UK could find themselves in an increasingly difficult position with regard to their mortgage payment obligations. Anticipating a series of defaults attributed to the rising cost of living, some of the UK’s biggest banks may have no choice but to cut interest rates for the benefit of their customers,”
“Furthermore, the latest quarterly survey of credit conditions conducted by the Bank of England indicated that lenders in general intend to slow the supply of mortgages at a rate not seen since the outbreak of COVID. -19 This will make it more difficult for new customers to benefit from products such as bridging loans or for mortgages as the crisis plays out; locking even more Britons into expensive long-term private rentals. – UK property finance
The Bank of England survey referenced by UK Property Finance revealed no specific information on the extent to which lenders would restrict access to their mortgage products, but confirmed that more defaults were expected in the future. course of the next few months.
“The net percentage change in default rates on secured loans to households is expected to increase in the second quarter,” the BoE said.
Unprecedented increases in the cost of living
UK Property Finance has highlighted how households across the UK are already being forced to cope with the kinds of increases in the cost of living not seen in recent history, with inflation hitting a 30-year high of 7% in March. Fuel and energy prices have reached record highs, mortgage costs have risen dramatically for many and the economic impact of the pandemic is still being felt by millions of UK households.
“If lenders take action to reduce the availability of mortgage products, it will reverse the trend of an 18-month period in which the housing sector has shown nothing but exceptional performance. Average house prices continue to sit at historic highs, while the reintroduction of 95% LTV mortgages by many lenders has encouraged more first-time buyers to apply. UK property finance
Speaking on behalf of senior personal finance analyst Hargreaves Lansdown, Sarah Coles also warned that the UK’s growing cost of living crisis could push many people into a dangerous spiral of debt.
“With inflation accelerating and skyrocketing prices for many basic necessities, this has forced us to borrow to make ends meet,” she said.
“Credit card borrowing grew faster than any other month on record in February – the most recent month for which we have data,”
“But although it looks like a short-term solution, you create problems for the future, as you add interest and repayments to the ever-increasing mountain of monthly costs, making it harder and harder to stay on top of our finances every month.”
Electricity and gas bills for a typical UK household rose by £693 a year in April, while around 4.5 million prepaid customers can expect to pay an extra £708 in energy costs this year, an increase from £1,309 to £2,017.
This PR was created by UK property finance – a fully independent organization, regulated by the FCA, specializing in bespoke financial products and advice to property buyers, investors and developers. The company also operates bridgingloans.co.uk, the UK’s leading arranger and brokerage of smart short-term financial solutions.
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