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TODAY'S OTHER NEWS

ONS: Rental prices hit an all-time high

Rents have increased to their highest level on record, according to the latest price index from the Office of National Statistics (ONS). 

The latest report shows that the average monthly rent recorded between 1 April 2019 and 31 March 2020 was £700 for England. 

The highest monthly rent was for properties with four or more bedrooms, at an average of £1,300 per calendar month (pcm), compared with the lowest monthly rent at £400, which was for single rooms.

There was a large difference in average monthly rents between studios (£550) and single rooms (£400), which could have been driven by high volumes of data in the sample of studios located in London and the South East representing just under half of the sample size.

London had the highest median monthly rent at £1,425, which is more than double the average monthly rent for England.

The North East had the lowest median monthly rent at £495.

The difference in monthly rental price between the most and least expensive local authorities was almost £2,100.

Matthew Hooker, co-founder of rental deposit replacement, Ome, said: “Rental affordability remains a burning issue and one that will continue to plague the market having been greatly exacerbated by the arrival of COVID-19.

“We’ve seen tenants across the UK squeezed in recent years where the cost of living is concerned as wage growth has failed to keep pace with ever-increasing rental costs.

“However, this will have become a much bigger issue for those that now find themselves on restricted income or recently unemployed, with the cost of renting now hitting an all-time high.

“The extended eviction ban will do little to comfort those with an eye on their long-term future within the rental sector. It is likely we will see a lengthy backlog of evictions over the coming months as more and more tenants struggle financially. 

“While tough, the best advice for tenants currently is to reduce their outgoings where possible, continue to maintain rental payments where they can and keep communication frequent and open with their landlord.” 

Poll: Do you expect rents to rise over the next few months?

PLACE YOUR VOTE BELOW

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    Well well well but then the real landlords already knew this would happen. A certain doomster should be apologising when he eventually wakes up!!!

    Mark Wilson

    Well the problem with averages is that they are just that. The stats also include single rooms, so it is a market I don't touch.

    Rents in central London are down post crisis 20% to 25%, so if they were at an all time high in March, they sure are not now.

    Do you think that with mass unemployment and falling wages that rents will rise?

    Good luck if you do!

     
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    Ah morning Mark. Central London rents are a separate market driven by different forces compared to rest of UK. Its traditionally a start off point for immigrants, young people attracted from around the country by the big lights etc. We also allowed 'big money' from other countries to park itself legally in these properties. This was a precursor in itself that helped drive up property prices as well as rents. A higher proportion of salary goes on living costs. Its the price you pay to live in the capital. Its been like that for many years. The retail/service industry has been largest hit by Covid-19. These low paid multi sharing renters of high value properties without pay are responsible for the rent drop in this area.
    The London market has created problems for UK wide landlords with lower cost rental properties. It was companies like Foxtons that help cause the tenancy fees ban. We are all paying now for their greed.
    However we have massive under supply at the lower end of the market hence 20 X applicants for one property. Mass unemployment will cover most rents via UC in our areas. Lower wages will not affect us as much.

     
    Mark Wilson

    If history repeats there could be a ripple effect, starting in London and then moving out across the rest of the UK.

    I recall in the early 90's the market had literally stopped in London, but the rest of the country had a very strong market. It didn't last.

     
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    By "country" I assume you mean England and not UK?

    I have NEVER experienced rental falls in Scotland and that was before the SNP's contributions caused the recent 33% increase in rents achieved for the best properties.

    I do NOT expect anything other than sustained healthy rent increases in Scotland over the foreseeable future.

     
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    Here in Norwich we are doing well, but I can see London being hit

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    "The highest monthly rent was for properties with four or more bedrooms". Whoever would have guessed that? Bigger properties command higher rents...…. Well, well, well. I honestly never knew that. You learn something new every day! (Was the person who wrote this sentence from the Ministry of the Bleedin' Obvious?)

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    In the short to medium term, the rents will drop in London and the number of Landlords leaving the market will continue as people lose jobs and many industries restructure after covid forced shut down. As the businesses and employment recover and demand for properties increase, less landlords and rental stock in the market means rents will go up. However, it all depends on the economy, cure for covid -19 and sensible government policies. As far as I can see there are no alternative to PRS

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    I don't really give a sh*t!

    My tenants are 1 year into a 3 year AST in June......So two years to go. :-)
    I have told the tenant that I will not accept any form of rent default, such as non payment, reduced payment or even one penny less that the AST states.

    If they want to leave within the agreed limits, then OK.

    But even then, one of the issues I will have in the next contract is that I will insist any new tenant gives a guarantor for at least 4 months rent if the tenant leaves before the contractual point.

    No Guarantor, no rented house. It is MY house, so you abide my rules.

    Ain't life tough!?

     
  • icon

    We all knew this would happen and it will just get worse.
    The government and councils keep rushing in more and more demands on landlords, legislation, required certificates, more tax demands, stamp duty, and cutting back of allowed deposits and any tax relief. etc. etc, at the same time they also making it more and more difficult to evict bad, antisocial and nonpaying tenants, some of these tenants trash the properties and LL end up paying out thousands to put it all right with no hope of recourse against the tennent.

    There seems to be well-organized hate campaigns directed at LL that the government keeps pandering to, hoping to keep their votes, while small LL have practically no voice and no organization with any backbone or power to speak up for them and convey their problems and struggles.

    Meanwhile, social housing has been cut right back, immigration is sky high and house building is way behind what is needed to house the ever-expanding population.
    So we have a huge housing shortage and massive housing demand, as many LL sell up, fed up with being battered from all sides.

    These groups seem to not realize that for the vast majority of LL they have mortgages to pay on their properties and that this is a business, its how they earn a living, and like any business it has expenses that these lot are forever driving up. It all has to be paid for and of course like all businesses the expenses are passed onto the customer, or the business goes under, so the tenant has to pay for it, it's not rocket science.

    As long as LL are demonized and viewed as rich, money-grabbing pariahs that need to be controlled and taxed to the hilt, and tenants are poor helpless victims, things will only get worse for all concerned.

  • icon

    Excellent.....and this situation will not change under ANY Government.
    They just plain don't get it, and never have.

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    Let's here it for.....
    Section 24 tenant tax
    No Tenant Fees
    Increased legislation & costs
    Prudential portfolio restrictions....
    Oh rents have go up have they..?
    You do surprise me....

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    And as far as I am concerned, my rent will go up at about 20% MORE than whatever the Government throws at me with regard to the cost of running my business.

    To me, that is just simple business practice.

    If my costs increase, so does the price of my product.

    That is standard Keynsian economics, and no business can stand increased costs with diminishing income. Simple. VERY SIMPLE.

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    nb

    factor in that electricity will over time be phased out of residential homes

    if you need new boiler etc--change to electric

    guess what the electricity will be generated by gas fired power stations and uk will import gas as we are not allowed to frack gas

    i often wonder if our politicians are all mentally defective but more likely they are in it for money?

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