In what has been a busy morning for data for Mortgage and Property professionals with the latest CPI data announced at 7am today, the Index of Private Housing Rental Prices (June 2023) was also published this morning revealing even more pressure on the already challenging market place for rental properties.
Mortgage and property experts have been sharing their reaction to the data and what’s going on in the rental market as follows:
Michelle Lawson, director at Fareham-based broker, Lawson Financial: “Rents continuing to rise really is no surprise. With rising mortgage costs, increased regulatory costs and the removal of Section 24, landlords cannot absorb these rises any more and they are naturally having to be passed up the chain. One thing that needs to be understood is landlords should not be vilified nor the sector made any more divisive than it is as they do not do this without just cause as a good tenant is worth their weight in gold.”
Rhys Schofield, managing director at Derbyshire-based mortgage advisers, Peak Mortgages and Protection: “It may be politically convenient to kick landlords from time to time but when demand is up 48% on pre-Covid levels, available stock is like hen’s teeth and with few viable alternatives to private rental for many, it’s clear that we need a healthy buy-to-let market. Rents being forced ever upward certainly doesn’t do tenants any favours and that is the risk faced if we drive landlords out.”
Riccardo Tessaro, Co-Founder & CEO of flexible co-living brand Gravity Co, comments:
“Thousands of tenants have become trapped in a pressure cooker of limited supply, high competition for rental homes and rapidly rising rents.
“Relentlessly rising mortgage interest rates – which have now climbed above those seen following last year’s mini-Budget – are pushing up landlords’ costs and many are passing these costs onto their tenants in the form of rent increases.
“Renters are also grappling with a shortage of homes to rent as smaller landlords exit the lettings market as they decide their sums no longer add up.
“This reduced supply is forcing some would-be tenants into bidding wars where they feel they have no choice but to pay above market value to secure a place to live, further pushing up rents.
“This intense competition is particularly acute in London, where rents have been driven up by 5.3% over the past year.
“These cost of living pressures mean people are increasingly searching for accommodation which also includes utility bills, as this gives tenants a much clearer idea of their total costs over a set period. This is particularly helpful at the moment as energy bills are still at historic highs.”
Stuart Crispe, founder at Sunny Avenue: “The data is unsurprising. There is a pronounced shortage of rental supply and always has been. I am surprised the increases aren’t higher given the mortgage rate increases we have had. Landlords, currently, will either be deciding to increase their rents or sell up. Either way, this is only going to further increase rents, putting more pressure on tenants.”