Government data suggests annual rental growth remained at 1.3% across the UK for the fifth consecutive month in October, but there are warnings that the rate of increase could accelerate.
Figures from the Office of National Statistics found that average private rental prices rose by 1.3% in the 12 months to October, unchanged since May.
Rents in England grew by 1.4% in the 12 months to October, up slightly from 1.3% in the year to September.
Annual rental growth was unchanged in Wales, up 1.2%, and slowed from 0.8% to 0.7% in Scotland.
Rents increased by 1.9% in Northern Ireland.
However, Belvoir is warning that rents could rise further as its offices witness a lack of stock.
Analysis of 140 offices in the agency franchise found that 15 reported stock shortages at the end of the third quarter as fewer landlords are purchasing and some are still selling up.
More than half of Belvoir offices confirmed an increase in landlords offloading four to five properties and the percentage of offices reporting no landlords buying has doubled since 2016, Belvoir said.
The agent warned that there are more tenants than properties to rent in most areas it covers.
Its office data showed that rents increased by 4.75% annually to £819 as of the end of the third quarter.
Belvoir’s analysis found that increasing numbers of families are renting out of choice rather than necessity.
Three quarters of Belvoir offices reported an increase in the number of families renting.
Agents reported that those renting weren’t just doing so because they couldn’t afford to buy, but many rented due to job moves, lack of social/council housing, renting as a temporary solution to avoid losing a sale, or the inability to find a property they wanted to buy.
It was also claimed that these types of tenants preferred the flexibility of renting a larger property in an area that they would not be able to buy.
Dorian Gonsalves, chief executive of Belvoir, said: “The survey suggests that the idea that families are renting purely due to affordability issues isn’t necessarily true, as many are finding it a practical solution to their current issues.
“However, for those that are renting in the private sector because of a lack of social housing, this suggests that if the proposed abolition of Section 21 goes ahead and there are less properties to rent, it could seriously damage the very tenants the Government is trying to help.
“Tenants and landlords that continue to let are doing so amicably and at affordable rents.
“The key issue moving forward is that in most areas there are more tenants than there are properties to rent. If this trend continues, it is likely to put upward pressure on rents.”
Comments (6)
I bought my business in 1988, and never before today have I had no property to offer to rent. I have 100% occupancy, this sounds good but actually it`s bad as it shows the PRS is contracting & will continue. L/L benefits are now marginal & I struggle to replace lost stock due to retirement or natural disposal. The PRS is being corrupted by forces that do not want it expand.
I know lots of portfolio landlords who are selling up;
– EPC regs tightening
– Electric Certs likely to become mandatory
– Talk of 3 years tenancies
– Section 21 abolition
– Section 24 Mortgage Interest
– Local licensing fees/red tape
Landlords are an easy win political punch bag.
Supply will do down, rents will go up and in 20 years, we’ll be back where we were with the ridiculous 1977 Rent Act with private rental down to 7% of UK housing and shocking housing conditions.
But politicians only care about their next parliamentary appointment and don’t give a damn, because it will be someone else’s mess to clear up.
A lot of the rent increases are a result of the TFB rather than landlords selling up. Although I have a group of single property landlords that are prepared to pull the plug if the section 21 abolition goes ahead.
Yes, a fellow landlord had a recent enquiry from people on benefits who couldn’t get a good guarantor but said they could pay 3 months rent in advance followed by monthly payments. When we checked the Welsh version of the Tenancy Fees Act, it was really complex about this and there was a risk that if a payment of 50p extra was taken, for example, the landlord could face a mandatory minimum fine of £1,000 for a prohibited payment and a criminal record. Who is going to risk that? Naturally, Shelter would call this ‘discrimination.’ On the other hand, if the landlord took a risk and granted a tenancy and later on the tenants couldn’t afford the rent/spent the rent on other things, Shelter would be the first in line helping the tenant to get the landlord fined and given a criminal record for the tiny prohibited payment or any other technical/administrative failing they could find.
Wales: A “permitted variation” is one made by agreement between the tenant and the landlord or under a term in the contract providing for rent variation. If you both agree you can do what you both like with taking more than one months rent up front.
Dorian is correct. We have seen a 5% rise in rents and massive shortage of properties for the numbers of tenants. That old chestnut “No DSS” hasn’t gone away and never will and we have seen a ten fold of those enquiries, nearly all living in hotels and B&Bs. Corbyn & McDonnell threats of RTB has already made it near impossible to home people on benefits.