The average UK rental price hits another all-time high of £1,261 pcm, increasing a further 1.4 per cent from last month. Excluding London, the average price of rent in the UK is £1,051 pcm, also up up 1.4 per cent from last month.
London prices continue to soar, up 1.7 per cent in just a month to a new high of £2,145 pcm.
The figures come from HomeLet; chief executive officer Andy Halstead says: “As summer 2023 prepares to bow out and temperatures drop, rental price records continue to soar across 50,000 new tenancies referenced by Homelet during August alone.
“Average monthly rent reached £2,145 per month with London included, and outside of London, an incredible £1,051 per month, every single region is reporting a sizeable month-on-month increase. These figures, on top of the current cost of living, are jaw-dropping.
“It isn’t just tenants who are feeling the financial strains of increasing rental prices. The exacerbating economic issues around rental prices are also leaving landlords with increasing rent arrears, resulting in struggles to make mortgage payments and other expenses.
“It really is a vicious circle, with very few winners. We see no end to the madness, with rental supply coming under more pressure as Landlords try and exit the market.”
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🆘🆘💰💰 I see more “jaws dropping “ in the months to come as the RRB makes its way through. Sell whilst the government allows you too 😱😱
It is a good job that rents have risen, as there would be a lot more landlords selling up
You increase interest rates and now have sky high mortgage payments per month then what are you expecting with rent review? They increase with interest rates.
And then landlords pitch a fit when people move out or go into arrears. But you don't want tenants who are getting state assistance.
You can raise your prices OR you can have people pay their rent. Not both right now.
Oh yes we can Raine, they either pay the rent or live on the streets, we don't want those on benefits because experance has shown us that these are the very tenants that don't pay, it's a hard world out there suck it up buttercup
Thank you Rachel Maclean & Michael Gove Housing Secretary. Why do you hate Tenants so much imposing this on them, any pennies dropping yet.
The lunatics are running the Asylum.
Micheal Give is a menace and he needs sacking completely
My fixed rate ended on 1st September. The renewal rates for a 2 year fix were pretty much the same as the variable rate once the fees were factored in. So I decided to just stay on variable as I want to sell. The monthly payment has gone up from £178 to £480, that cannot be passed on to the tenant as that would be an increase of nearly 40% and people think that rent rises are jaw dropping? This is why rents are rising. Personally I am fortunate and have been able to pay down £45k of the mortgage snd increased the tenants rent by £100 per month. not ideal, but a way round it until I can sell.
With increased interest rates this is only going to get worse. As landlords reach the end of their mortgage fixes things are going to get pretty dire. The monthly payment increases on my fixes that have ended this year have been between about £430 and over £700 per property per month. For a small landlord with only one property even if they aren't affected by Section 24 that kind of increase is going to be impossible to cover. How many of those properties will be running at a loss? How many of those landlords are willing and able to put money into their BTL from other sources month after month?
Any unincorporated portfolio landlord will also have to factor in Section 24. The only positive thing for portfolio landlords is that they potentially have more tenancies to spread the required rent increases over. I reckon it will take 3 years of moderate rent increases across my entire portfolio to cover this year's mortgage increases. I'm already planning for the next batch of mortgage fix ends in 2027.
Obviously there are some unencumbered landlords who aren't directly affected by mortgage rates or Section 24 but even they must be questioning yield. Do they need the work and responsibility of BTL when they would make more money simply by selling the house and putting the money in a savings account? With house prices falling that must be tempting.
Return the PRS to a traditional method of taxation and rent rises wouldn't need to be quite so huge. Stop treating landlords as unpaid tax collectors. With Section 24 to cover a monthly mortgage interest increase of £500 the rent needs to increase by between £667 and £1000 for the landlord to cover the extra interest and tax. He hasn't received a penny extra to go towards any other increased costs.
The amazing thing about all this is its so easy for Government to improve the situation instantly. All the Government needs to do is reverse the deliberate Policies that are a major factor contributing to all this.
Scrap THE RENTERS REFORM BILL now including reinstating fully Section 21. Scrap the unjust Section 24 that should never been introduced.
Everyone knows those are the common denominators in all this.
Have to admit, I'm absolutely gobsmacked at the recent rent increases over the last 2 - 3 years.
1 of our houses has just become available for rent. I need to head back to refurbish it and will get it back on the market in a few weeks.
Never been sure of correct market rent rates, so let agent fix them.
Only other house in same street with same decor, but with a lot smaller garden up for 30% more than what we have!!
I see a 30% rent increase the next time this house is relet.
I also have seen those 30%+ rent increases when re letting
Be careful letting agents set rent, we let 1 property for £600 pcm when agents suggested £450 max. The market is so volatile they don’t know the market like they used to
With mortgage interest rates at around 6% (and often ridiculous arrangement fee amounts), it's pretty much impossible to borrow enough to buy a rental property now. Even on interest only, the rental income won't cover repayments, unless you have a huge cash deposit to put down.
And actually, if you factor in all of the costs associated with buying and running a buy to let and the maintenance costs, etc, you'd make more (with less stress!) by putting any spare cash into a higher rate savings account.
For me, it's very much a return to the early days when I was sold the dream of buy to let as a profit making business. Interest rates were extremely high, profit from rental income very small but the hope was that you would make money in the long run from capital appreciation on the property. Capital appreciation is probably a thing of the past!
In the past it felt good being able to provide homes to families at a reasonable rent, some of my past tenants left because they had bought their own home, which I was always pleased about.
But it doesn't feel good being a landlord anymore. I have one property left, agency managed. The agency suggested I could raise the rent by £50 a month and I know I the market rent is even higher.
But I'm lucky to be still on a very low fixed rate mortgage so I said no, just raise it to by £20. The tenants said they couldn't afford it, maybe they can, maybe they can't but I didn't push it, they're good long term tenants who look after the house well. What's the point in putting up rents to the point where they're not affordable! As a side note, I thought I'd get the front door painted, quote is £215. Any trades person is now charging at least £200 a day.
My point is, perhaps it's time to accept the demise of the private rental sector, it feels like private landlords are being hounded out of the sector anyway. It's been said many times. we aren't treated as a business, we are vilified by the media, hated by tenants and it's not worth it any more for the stress and small returns. My apinion, perhaps other landlords don't agree?
There needs to be more investment in housing by the public sector and somehow a way for people to buy their own homes without lining the pockets of property developers and pushing up house prices further.
Hi Karen , I can wholeheartedly agree with a lot of your comments above. It is back to the days when I first started my portfolio but now Landlord's are vilified and it does give me much less pleasure being a Landlord. I can see myself buying a run down property, carrying out a re-furb and then selling it. Far less hassle but will still give me something to do in addition to my normal job!
The problem for a Landlord now, whom also has another income, is Section 24 tax. Not being able to offset the full loan as all other businesses can do means that the Landlord now unfairly gets pushed into the higher rate of income tax.
BTL would never have happened if this had been the case in the past. This Government and any future Government need to encourage future Landlords not disincentive them.
I would also be wary of Government interference with people buying a property as this will cause problems, this will need to be looked at very carefully so as not to cause undesirable consequences!
It will take me sometime to off-load all my BTL. 2 has been sold. 3 to go within 18 months. One of the fixed rate completes in January 2025 at rate of 1.79%. I shall have to fix that at a higher rate, as we are keeping this property for our future stay. We will sell our residential within 5 years. Then all others fixed rate falls due in 2027, like Jo. 1 or 2 of them will be sold at that time. Just have to reduce capital for some of the mortgages that are planned to be sold off.
I'm in a similar boat to you, I have also sold 2 properties, have delayed selling another one and still waiting for bailiffs for one in Norwich that I intend to re-furb and sell next year.
Will then review but as it stands likely to be selling more, enough is enough!
Five left out of 13. Will all be gone in next two years. Up yours Gove, Osborne, and the rest of this lefty hand wringing liberal excuse for a so called conservative government.
Agree with all above. Thank you for sharing experiences and thoughts. They all influence my thinking and so are priceless . I do wonder if anyone from gov or labour are actually doing their homework and reading (digesting !) these comments. They are real perspectives, real people, the real world. Does anyone in government (either today or tomorrow) care, do their due diligence. I've increasingly come to the conclusion that politicians seem to thrive on chaos (make chaos) as it provides an opportunity to exploit the situation (to benefit corporate LL chums for example), and/or distract/hide issues they want hidden or create scapegoats by dividing opinion, making LLs today's bogeyman. As always, when the LL suffers, by default, so do tenants. LL's have options. Tenants less so.
I agree. The chaos being caused (in general across the western world) is deliberate. It's all to do with the global financial system.
I have let Co-op Bank know in no uncertain terms the financial consequences of sponsoring anti-landlord Charity one of the biggest causes of homelessness and landlord exiting.
What amazes me is that landlords are complaining about mortgage rate rises! I bought my first BTL in 1995 and my advisor at the time said, use as much rent as possible to pay off the mortgage as quickly as possible, use the tenant's money not your own. In 2003, mortgage rates were at their lowest since 1954 with fixed rates at c4.5% from 2009 rates were below 1%! So, anyone who purchased BTL in the past say 15 years was either wildly wrong with their gearing or has not been paying down the mortgage, who's fault is it that they still have mortgages and now have high rates to contend with?
Agreed always pay down debt
I bought my first around 2000 & have just paid off the last of the mortgages. But anyone who bought in the last 5 years may not be as lucky as we are. If you are trying to build a portfolio you use the rent to buy your next property - I did. We were lucky to live through 15yrs of ultra low mortgages. I didn't make any profit for the first 10 years whilst building my portfolio so I have sympathy for those caught out by this incredibly fast rising mortgage market.
To be fair, I have operated this way, most of my friends who purchased BTL didn’t, but there is no right or wrong, I just wanted to get them mortgage free by the time I retired, not too far off now…. But now I will be selling early due to this useless government.
These useless governments are continually changing the tax paying goalposts. How can a business plan when it isn't sure what the rules of the game will be in three years time.
Landlords are being made the scapegoat at present by tenants, shelter and the government - each with their own agenda.
I'm lucky I secured 10yrs fixed rate mortgages of 2.9% in Feb 2022 so I'm not affected by current interest rate hikes. But I have increased my rents by 40% over past 2 years because of new BTL tax rules introduced by Tories and new council licencing schemes to cover my income loss.
Why blame landlords - the Tories are taxing the less well off yet again - renters are footing the Tory interest rate and tax increases. Councils just want to make more money from licencing schemes without actually doing anything to improve the situation.
Renters are being duped by Tories and Councils - not landlords
I agree with you I am a basic rate tax payer I am.sure that section 24 will push me into the 40% tax bracket
Guess who iss going to pay for that? Clue:- it won't be me but no doubt I will get it in the media
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