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Soaring landlord costs to push rents up 25% over next four years - forecast

Rents will rise 25 per cent over the next four years, outpacing the modest 5.5 per cent House price growth across Britain during the same period.

The prediction has come from Hamptons, the lettings agency, which says house price falls will stop next year followed by small rises in 2025 and 2026.

But Hamptons says that taking inflation into account, average prices in Britain will have declined by nearly 10 per cent between the start of 2023 and the end of 2024.  


However in the private rental sector te  build-up of long-term supply issues combined with rising landlord costs will continue to put pressure on rents.  

“We forecast the average rent on a newly let property in Great Britain will rise 8.0 in Q4 2023, 7.0 per cent in Q4 2024 and 5.0 in both Q4 2025 and 2026” says the agency. 

London rents are likely to rise faster than the all-Britain average in 2023 and 2024 by 9.0 and 8.0 per cent respectively.

A combination of lower yields and more landlords being reliant on finance will put added pressure on investor profits in the capital, Hamptons warns. 

Agency research head Aneisha Beveridge says: “There’s a strong argument that the Bank of England’s quest to quell inflation has hit the rental sector harder than any other part of the housing market.  A build-up of long-term supply issues combined with soaring landlord costs is putting upward pressure on rents.  

“And it’s hard to see any of these pressures receding any time soon, which is why we expect rents to continue rising over the next few years.”

Hamptons says give that 68 per cent of landlords own a buy-to-let with some sort of finance, rents will primarily be set by where interest rates settle in the medium term.  

“We forecast rents will rise by 25 per cent across Great Britain between 2023 and 2026 with the largest increases during 2023 and 2024 as landlords roll off fixed term deals and face considerably higher mortgage payments” it adds.

This will likely put the average rent of a home in Great Britain at £1,550pcm, £333pcm more than in December 2022.  Despite this rental growth, many landlords will still find themselves materially worse off than a couple of years ago.


The agency anticipates that rental growth will be led by the North of England and London over the next year.  

These are places where larger portfolio landlords, which are more likely to be reliant on some form of finance, are most active.  London is also the lowest yielding region in the country on average and so landlords here have less ability to absorb higher costs.

And it warns that the Renters Reform Bill is likely to further add to landlords’ costs, and more regulation may well be in the pipeline whichever party wins the general election.

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    Comparing rent increases with house price growth is a nonsense. Comparing rent with increased mortgage interest rates would be more appropriate. BTL rates have increased from below 2% to over 5% in the space of 18 months. Isn't that a 150% increase?
    Homeowners are also facing these increases as their fixes come to an end. Of course homeowners don't have the added burden of Section 24 to factor in.

    Over the last 15 years a great many of us didn't tend to increase rents for existing tenants. Our costs weren't rising significantly so we tended to just leave it alone. Some of those tenants are now paying way below market rent. Do we ever get thanked for it? Of course a rent increase is unwelcome but if they want to keep their homes it's essential. Now banks are paying decent interest on savings we have choices to make. It's about time the government and media accepted we are a business, not a hobby or a charity. It's in our interests to look after our tenants so most of us won't increase rents more than is necessary. How much is necessary is in the hands of the government with Section 24 and other punitive policies and the BoE.

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    Well whatever the percentage is, we know it will be bad for tenants as more of us sell up 💵💵. If inflation stays at around the 7% and a landlord ups their rent by this much every year……. Why not 25% 🤷‍♂️

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    LLs will be able to charge almost whatever they want as the PRS shrinks in the face of increasing demand. Some will capitalise on this, others will try to keep their rents affordable for their tenants. With the added pain of the RRB & EPC C coming at LLs the bottom line is that it will just keep getting worse for tenants.

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    TBH I think rents will be pushed up a lot more than that

  • Peter Why Do I Bother

    All mine except one have gone up and will go up again.

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    If EPC C becomes mandatory and LL will sell tens of thousands of houses as it is not economically viable to spend £13,600 so a tenant can pay £3 less a month on utility bills. In some areas like the North terraced houses are the majority so if these houses are sold there simply won't be enough rental houses in PRS so LL can charge whatever they want if they have a C rated property.

  • John Wathen

    Until the Marxist pressure groups and politicians of all persuasions accept that the Private Rental Sector is just that, - private and, apart from the crooks, leave it alone, rents will be constantly forced up directly due to their misguided actions. We are not Social Housing which is completely separate & actually is in dire need of their vociferous interference!

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    So many good comments here. I wish policy makers would stop and really read them. Scotland has rent caps on the PRS of 3% in place now (as well as eviction bans). Social housing has no rent caps (in recognition of their increasing costs! Seriously!)
    Scot Gov refuse to believe/acknowledge there is such as thing as a PRS and believes only in social rentals. Watch this space as the PRS continues to the point of oblivion in Scotland.

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    There is so much anger when you read letters from LL's it makes us sound like a pretty despotic bunch, when actually all we want to do is be allowed to get on with the job.
    I wrote to Michael Gove in the hope we would have a reprieve of sorts, I hope others have done the same.
    As a LL, I have a lot of real decent tenants from all walks of life but there seems to be a need to turn us into tenant bashing morons. Why do we have to have so much legislation just to do a job? We are not idiots and understand that people living in our properties need to be safe and free from hazards but that goes for everyone, not just those living in rented property.
    The adage most LL's are using is that they'll sell up, and "that'll serve 'em right", but it won't make any difference. You can compare the amount of property with a cake, doesn't matter how you carve it up or who owns it there's still one cake.
    The Government is well aware that we'll all just suck it up and get on with it 'cos that is what we always do and we are already in too deep.
    I think the thing that annoys me most is the fact that as the property owner and LL, everyone jumps on the band wagon, in the way of pop up businesses to make a quick buck out of us, EPC certification, boiler safety checks, electricity safety checks, carbon monoxide alarms, smoke alarms etc. etc. property management companies, letting agents. None of these people have taken any financial risk in my property, but are allowed to make a profit out of it. The Government also knows this but is quite happy to allow more and more legislation because it benefits by stealth in taxes paid by the people who have already over charged us for their services.
    Ll's are just cash cows for a Government which seems hell bent on breaking us because as LL's, we, it seems, have no voice and no rights at all.

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    • A JR
    • 13 September 2023 07:24 AM

    I have written repeatedly to my MP and ministers over the past 2-3 yrs and received nothing but stock acknowledgements or a short letter simply towing the governments PRS corrosive line. I conclude that they are not listening, they have their heads in the sand knowing that they will be out at the next election.


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