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Rent rises outstripping interest rate hikes, says market monitor

The continuing rent rises seen across much of the country are outpacing increases in interest rates, it’s been claimed. 

Property website Home, which issues an authoritative monthly market assessment for the rental and sales sectors, says in its release out today: “Rents continue their upward spiral, considerably outpacing monetary inflation by a large margin. Hence, yields are improving rapidly across the country, thereby incentivising Buy to Let purchases. Moreover, rental yield growth is certainly outpacing the tardy and tiny interest rate rises by the Bank of England. 

“Furthermore, the unprecedented large and widening spread between mortgage interest rates and inflation continues to incentivise leveraged property purchases.”


Home says the mix-adjusted average rent rise across the UK over the past year is an eye-watering 19.1 per cent, driven partly by plummeting supply - the number of newly available rental properties is down 23 per cent now compared to June 2021, triggered by a spectacular rise in London rents following the pandemic fall-off.

The website suggests that supply of rental properties has become particularly diminished in the capital. 

The number of newly available rental properties being marketed online during the last 30 days is 46 per cent down on a year ago, prompting huge rent rises. 

“Hackney, Merton and Lambeth boroughs show the greatest rises in asking rents over the last 12 months, with all three indicating an increase of 42 per cent, which is several times the rate of monetary inflation by any chosen measure” notes Home.

The website also suggests that the sales market may be benefitting from the strength of the private rental sector, with demand from investors remaining high or possibly even rising as investors pile in to a sector in a bid to combat rising inflation eroding their gains.

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    Rents are tied more closely to market averages than actual costs. Lack of supply allows LLs to ask for higher rents and many are doing so to cover not only the interest rate rises already announced but also the ones predicted over the next year, in addition to a rise in costs of everything else due to inflation.

    With a rent rises generally only occurring once a year, LLs need to look ahead as well as behind.

    Oh - and don't forget to add in the eye-watering cost of selective licensing that so many of us are being forced to pay!

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    Talking to a tenant of mine in a coffee shop yesterday he claims the food he buys in has increased by 30%, I have no reason not to believe him, yet we are told inflation is currently 9%, I think we all know that's a lie in the real world


    Perhaps it's time for tenants to stop going to coffee shops and keep money for rent and other essentials?

    I've stopped going to my pub as supermarket beer is so much cheaper - but I'll miss the pub!

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    This will be nothing compared to rent if (when) the mandatory EPC C arrives. Then it’s buy a tent time and find a field !!


    In Norwich the tents are under a fly over


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