Britain is going to experience surging rent rates as more and more people enter the rental market and the choice of properties gets fewer and fewer.
According to the Royal Institution of Chartered Surveyors (RICS), over the three months to July, the demand for rental properties increased “firmly.” It marks the most significant quarterly increase in demand since the beginning of the year.
Simultaneously, there is an imbalance in demand and supply, as most surveyors pointed out that landlord instructions had reduced further.
As per the survey by RICS, about 63% of the surveyors believe that rents are expected to surge in the coming three months. Such a high percentage of expectancy was observed back in 1999.
Due to the “frenzied” lettings market, tenant demand reached a five-month high in April.
The affordability of the rents is reaching its “tipping point” and will remain high for a long time, as per one respondent.
According to analysis, renters are now the majority in the UK, with people who own their property outright coming in second and mortgage holders coming in third.
According to RICS chief economist Simon Rubinsohn, “Demand shows no signs of letting up; supply remains constrained, and that means rents are likely to continue rising sharply despite the cost of living crisis.”
As per the survey, 44% of respondents agreed that interest in acquiring properties dropped in July, recording the weakest sales when compared to the early stages of the pandemic.
Regardless of mortgages becoming more expensive, as the Bank of England increased its rate hikes to reduce inflation, the demand to sell homes also declined.
According to UK Finance, the banking industry trade organization, the average rate on two- and five-year fixed arrangements has topped 6%, with an estimated 2.4 million mortgage holders needing to lock in a new contract by the end of 2024.
House prices have been decreasing as mortgage rates have climbed and construction activity has stalled.
The effect of that fall was observed when one of the giant UK homebuilders, Bellway, declared that it would plan to cut down on jobs and also close sites.
- Published By Team Timeswire