Money News

Rising rent prices tenants out

By Martin Fagan - news@consumerchoices.co.uk

Renters and first-time buyers struggle as they are priced out of the markets.

Increased tenant demand and low levels of rental property coming onto the market pushed up rents in the three months to April, according to the latest Residential Lettings Survey from the Royal Institute of Chartered Surveyors (RICS).

Overall, 42% more surveyors reported increased rents in the three months to April. Although rents increased across Great Britain, it was London and the South East which saw the most notable hikes.

According to RICS, supply to the rental market was unable to keep up with demand. Tenants are staying longer - resulting in less availability - while fewer landlords are selling their properties at the end of a tenancy.

The rent increases are also being fuelled by frustrated first-time buyers unable to enter the housing market, said RICS. Despite record low interest rates for the past two years, many potential buyers have been discouraged by higher deposits and tougher lending criteria.

As a result, surveyors report many first-time buyers have little choice but to rent.

“Although we’re beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market,” said James Scott-Lee, spokesperson for RICS.

“There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise.”

This is bleak news for tenants with no signs of respite in the future. Looking ahead, RICS says the trend looks set to continue, with 33% more surveyors expecting rents to rise rather than fall.

Expectations for rental prices were highest in London, followed by the Midlands, the South East and the North.