Posts with tag: rental increases

Rents are set to rise sharply by 2021

Published On: November 7, 2016 at 11:33 am


Categories: Property News

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A new report has indicated that rents in Britain are likely to rise sharply in the next five years, with more people choosing to rent over purchasing property.

The investigation by estate agency Savills forecasts than rents will increase by 19% between now and the year 2021. During the same period, purchase prices are tipped to only rise by 13%.

Capital pressure

Average rents are tipped to rise by 24.5% in London by the end of 2021, with the cost of buying going through the roof.

More pressure on rental prices is being caused by many would-be buyers who simply cannot afford to buy. Recent tax alterations are serving to deter many buy-to-let landlords from making further investments in the sector

With rents set to rise, Savills believe that home price growth is going to be largely flat over the next two years. This, the agency suggests, is due to Brexit negotiations leaving home buyer sentiment ‘fragile.’

Rents are set to rise sharply by 2021

Rents are set to rise sharply by 2021


Savills estimates UK house price will stay steady in 2017, then increase by 2% in 2018. Growth of 5.5% is expected in 2019 and 3% in 2020, with a fall to 2% in 2021.

Lucian Cook, UK head of residential research at Savills’ said: ‘Brexit has forced the market to change gear and created uncertainty. The period of negotiation with the EU is likely to be a rollercoaster of confidence.’[1]

‘Buyer sentiment across all sectors of the market is likely to be fragile during the period of negotiations to leave the EU,’ he added.[1]

The table below indicates how Savills projects rents to rise per year until 2021:

Year Rents
2017 +2.5%
2018 +4%
2019 +5%
2020 +3.5%
2021 +3%
Five year total +19%




Flatsharers raise budgets to combat higher rents

Published On: August 17, 2016 at 9:51 am


Categories: Property News

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The typical flatsharing tenant has moved to increase their budget, in order to combat rental rises, according to a new report.

EasyRoommate’s latest Index reveals that in the second quarter of the year, tenants’ average budget was £531pcm, up 5% on the same period twelve months ago.

Since 2012, tenants’ average budgets have risen by 25%.


The flatsharing website reports that budgets have increased in an attempt to keep pace with average rents. According to data from the Index, rents rose by 13% between Q2 of 2015 and 2016.

In addition, the rental platform said that demand for shared rental properties has also risen over the same period. During the second quarter of this year, there were an average of five tenants looking at each room available. This was compared to four last year.

What’s more, the number of rooms being posted on the EasyRoommate website has risen substantially, by over 40% since 2015.

The average age of a flatmate is 28, with 37% of sharers aged between 21 and 25.

Flatsharers raise budgets to combat higher rents

Flatsharers raise budgets to combat higher rents


Student tenants utilising the platform has increased by 4% in the same period.

EasyRoommate has also moved to attack the number of letting agent fees which are being charged to tenants.

It has called for the Renters’ Rights Bill, currently being passed through Parliament, to be implemented to improve tenants’ finances.

Albin Servant, chief executive of EasyRoommate, said, ‘every time you use an estate agency to find accommodation, you might incur extra fees. Meanwhile Scotland decided to ban those hidden fees in 2012.’[1]

‘Rent fees need to be regulated,’ he added.[1]


Rents set to rise faster than house prices

Published On: June 9, 2016 at 10:39 am


Categories: Property News

Tags: ,,,,


Tenants are set to see rents spiral quicker than their incomes and faster than property price growth, according to a concerning new report.

The study from the Royal Institution of Chartered Surveyors (RICS) suggests that while house prices are likely to rise, rents look set to outstrip them.

Rent rises, tenant concerns

People currently residing in privately rented accommodation are thought to bear the brunt of the tax increases for buy-to-let landlords. The fear is that this will lead to a reduction of properties on the rental market, that will in turn push rents higher.

RICS forecast that rents in Britain will rise by an average of 4.7% year-on-year for the next five years. This is in comparison to house prices, which are predicted to increase by 4.1%.

However, the RICS survey is not the only investigation pointing at bad news for renters. The most recent HomeLet Rental Index shows that cost of a new tenancy in the private markets in Britain, increased by 4.4% in the three months to May. This was with the exception of Greater London.

Rents set to rise faster than house prices

Rents set to rise faster than house prices


Rental price growth in Britain was led by Scotland, where rents increased by 10.6% year-on-year. This was followed by rises of 8.3% in the East Midlands. London saw a rise of 6.2%, with rent for new tenancies standing at £1,563.

Martin Totty, chief executive of Barbon Insurance Group, HomeLet’s parent company, observed, ‘the May HomeLet Rental Index continues to show a rental market characterised by steady growth in rents, as the number of tenants looking for property runs ahead of the supply in the market-that remains the picture in most regions of the country.’[1]




Rents rise by 2.6% in year to April

Published On: May 27, 2016 at 10:57 am


Categories: Property News

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Rents paid by private sector tenants in Britain rose by 2.6% in the year to April 2016, according to data released by the Office of National Statistics.

This was unchanged when compared to year-on-year results to March.

Rental rises

Since January 2011, rental prices in England have risen more than those in Wales and Scotland. This particular trend continued into the last month, with data from the private housing rental index from the ONS showing that rents rose by:

  • 8% in England
  • 2% in Wales
  • 5% in Scotland

In the year to March, rental prices rose in all regions of England. Unsurprisingly, London saw the greatest increase, of 3.7%.

As a whole, rental prices in England can be grouped in three periods. Prices increased markedly from January 2005 until February 2009, then dipped between July 2009 and February 2010. Since then, prices have spiralled.

Taking London out of the results, rental prices in England have followed a similar pattern, albeit with reduced rental rises from the end of 2010.

Rents rise by 2.6% in year to April

Rents rise by 2.6% in year to April

Regional growth

Year-on-year to April 2016, private rental prices have increased in all nine regions of England. London led the way, followed by the East and South East, with rises of 3% and 2.9% respectively. However, annual price rises have been greater in London than the rest of England since November 2010.

On the other hand, the North East, North West and Yorkshire and the Humber have continued to record the smallest annual rent rises.

Paul Smith, CEO of haart estate agents, believes rental accommodation will soon decline, as investors withdraw from the market in the wake of tax changes implemented by the Chancellor. He fears that this could lead to upward pressure on rental prices in the future.

Affordability issues

Smith said: ‘today’s data shows UK private housing rental prices increased 2.6% on the year as affordability issues in the sales market push up demand and therefore prices in the rental sector.’[1]

‘While the number of properties available to rent surged following a rush from buy-to-let investors in advance of the stamp duty changes on the 1st April, we are now seeing a decline in stock as investors withdraw from the market,’ Smith continued.[1]

Concluding, Mr Smith said, ‘ironicallym the government’s efforts to help first-time buyers by penalising investors, could end up hindering them as a shortage of rental properties will drive up rents in the long term, making it more difficult to save up for a deposit.’[1]


Scotland rent arrears rise

Published On: July 23, 2015 at 9:15 am


Categories: Property News

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A worrying report suggests that tenant arrears in Scotland are rising, despite letting agents’ fees on tenants being banned.

These types of fees are legal in England and Wales and experts commonly point to these costs as a reason why tenants are struggling financially.


Data from research conducted by Your Move indicates the proportion of rent arrears north of the border rose marginally from 8.8% in May to 9% in June. The growth was more substantial when assessing year-on-year data, with arrears standing at 6.1% in June 2014.[1]

‘It’s become clear over the past year that this isn’t a problem that’s going to fix itself, ‘said Brian Moran, lettings director at Your Move Scotland. ‘Greater supply of homes to let is the only way to definitively address the housing shortage and ease the financial pressure in the market.’[1]

Broader yields

More extensive rental data indicates that Scottish private sector rents have risen to stand 3.1% higher than one year ago. This means that the average rent in the country is £549 per month, with an increase of 0.8% in June alone.[1]

Scotland rent arrears rise

Scotland rent arrears rise

What’s more, rents have reached record highs in traditionally more affordable parts of Scotland, such as the East, South and Highlands.

‘It’s not just the big urban centres of Edinburgh and Glasgow which are coming up against an urgent shortfall of housing-there is furious demand for homes to let the length and breadth of the nation and that is underpinning this build-up in rental prices,’ observed Moran.[1]

Buoyant total annual returns are providing a welcome boost to landlords across Scotland – and represent a nice perk above steady monthly rental income. But most importantly, rental yields are also cruising along on an even keel, and have absorbed some of the recent shockwaves of the new Land and Buildings Transaction Tax, which has disrupted the course of property price growth more recently,’ Mr Moran added.[2]




Landlords Planning Further Rent Increases

Published On: June 20, 2013 at 9:21 am


Categories: Finance News

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Single people in their 20s will have to save for a deposit for up to 30 years, revealed Shelter.

An entire generation could be forced out of owning a house, housing charity Shelter also said.

Single people are facing the greatest obstacles in owning a house. They could need over 14 years to save enough money for a deposit, unless they enter into a relationship. Many are therefore trapped in the private rental sector, or living with their parents.

London faces the highest costs, with single people faced with 30 years of saving, while couples with children will wait 21 years before having enough money for a deposit.

Couples who have a family in their 20s could have 12 years of saving ahead of them, which is almost double that of childless couples.

This could result in couples having children in secondary school before they have their own house.

Couples without children have an average of six and a half years of saving, compared with 11 years in London.

The study is based on homeowners needed a 20% deposit. The research considered earnings, house prices, rents, and spending on essentials across the country.

There are also considerable regional differences in the time for first to buyers to save, according to Shelter.

In 60% of areas in England, couples with a child are looking at more than a decade of saving for a deposit.

High outgoings and house prices, alongside low incomes, mean couples with children in Devon, Cornwall and Leicester, need more time to save than the same couple in some parts of London.

Shelter has made an online calculator available for people to work out how long it should take them to save for a house in their area, based on their circumstances.

Landlords Planning Further Rent Increases

Landlords Planning Further Rent Increases

Lauren Pinney, 28, from Brighton, says: “My husband Ivan and I have tried everything to save for a deposit. We moved out of our one-bedroom flat and tried living with my parents for a while.

“Now we live in a flat share with friends to keep costs as low as possible, but with bills, rent and the cost of living going up, it’s just impossible.

“We both earn decent salaries, but it’s just not the same as it was in my parents’ generation.

“We want to start a family but we’ve had to resign ourselves to the fact that saving for both a child and deposit is not going to happen and we may never own a home of our own.”1

Chief Executive of Shelter, Campbell Robb, comments: “This is the first time research like this has been conducted at a local level to reveal the harsh realities that generation rent is having to confront because of our shortage of affordable homes.

“Despite working hard and saving what they can each money, today’s young people face life-changing choices between starting a family or buying a home of their own. Imagine a 28-year-old couple weighing up their options: they can save for a home now and put off starting a family until they’re 35, or they can start a family now but accept they’ll be renting until their child is a teenager.

“Meanwhile, single people face an added pressure to either find a partner or to live with their parents well into their 30s if they’re ever to have a hope of saving enough for a deposit.

“It seems the only ones with any hope left are the few who can resort to the bank of mum and dad. But with so many parents already feeling the squeeze, this is not a sustainable option.

“When we have young people working hard to save up for a home of their own to no avail, it is obvious that the Government has to start meeting people halfway. Unless we see radical action to tackle our chronic shortage of affordable homes, the next generation of young people will find it even harder to find a place to call their own.”1

The amount of affordable housing constructed in 2012-13 was down by 29% from the previous year. This shortage of homes forces higher rents and house prices, and deposits are even harder to save for.

Jack Dromey, shadow housing minister, says: “This research shows the scale of the housing crisis, and the impact it is having on young people and families, who are locked out from home ownership.

“David Cameron simply has no answer to Britain’s housing crisis. Despite relaunching his Get Britain Building programme four times and making hundreds of announcements, the number of affordable homes being built actually went down by a third in the last year.

“Labour has been calling for urgent action to tackle the biggest housing crisis in a generation. We need to bring forward investment in house building to tackle the chronic shortage of affordable homes, help the next generation find a home of their own, create thousands of jobs and apprenticeships and rebuild Britain for the future.”1

Housing minister Mark Prisk, adds: “The evidence shows that affordability has improved under this Government, with housing at its most affordable since 2003 and the highest number of first time buyers since 2007.

“We are building 170,000 new affordable homes across England, and have introduced a package of measures to help people move on to and up the housing ladder.”1