Voice of Commonwealth

What will the UK rental market look like in 2023?

Share

England (Common Wealth) _ According to the most recent Census figures, the number of households that privately rent has increased by more than a factor of two during the last two decades.

In December 2022, the average rent in the UK increased by 10.8% per year. For the second month in a row, the average rent in Greater London was more than £2,000 in December. According to HomeLet, even when London is taken out of the equation, rentals increased by 9.4%.

If you are a buy-to-let investor or landlord, it may sound like a pleasant little earner, but due to these hikes, a single renter now has to spend 35% of their salary in rent, according to Money Week, “the highest level ever l of housing affordability in over ten years.”

According to Time Out, “it’s not exactly a great time for Generation Rent” when you factor in rising prices for basics like electricity and household products.

 According to Sky News, the rental market is at its breaking point, with a dearth of inventory limiting tenant options, tax increases discouraging owners, and “increased competition for places.”

Prices in the private rental market are rising as a result of a lack of rental homes available, both privately and in the social housing sector. According to Time Out, “properties are being snapped up before viewings and bidding wars now appear to be common place.

 Since last year’s mini-budget enraged the markets, renters are also being stung by rising mortgage rates monetary marketplaces.

According to The Guardian, “some would-be first-time buyers who could no longer afford the property they wanted, or who were keen to wait for calmer conditions before proceeding, may decide to stay renting for longer,” driving up demand and rental costs.

However, “sharp rent increases” also seem to be brought on by landlords passing along increased interest rates from their own buy-to-let loans, and – in some circumstances – other tenants are following their lead even though they are not required to in what the newspaper called a “rent ratchet.”

Unsurprisingly, your rent is going to increase the closer you reside to London.

Renters might save almost £225 a month by moving 4.6 miles outside the city. This results in annual savings of $2,700 on average.

Additionally, rents tend to decrease as you travel further north. According to the Daily Mirror, the average monthly rent for a three-bedroom home in Stoke is £843, which is “over £4,000 less than the monthly cost of renting the same-sized property in London.”

Stoke-on-Trent was cited in the newspaper as the “ideal location for tenants looking to save on rent” based on research done by insurance company CIA Landlords. Sunderland was next with an average rent of £968.04 per month, followed by Kingston-upon-Hull with an average rent of £862.27 per month.

Image credit: www.thetimes.co.uk

By Suraj Athapaththu

Given the rising borrowing costs for landlords, it doesn’t appear that the rental market will become more affordable any time soon other regulatory adjustments that will raise the cost of investing,” according to Zoopla.

According to the real estate website, the financial mechanics of investing in residential real estate have changed recently. This is because stricter rules and higher expenses are lowering returns, discouraging new investment, and motivating some landlords to sell, which further reduces supply and raises rents.

According to FT Adviser, “persistent pressure on first-time buyers, inflation, and high demand” will drive up rent this year. It stated that broker Finanze expects a 12.91% increase throughout the UK.

Property Road said that the Royal Institute of Chartered Surveyors predicted a 15% increase this year if there are no changes made to the buy-to-let sector.

Read more

More News