Industry News
Private sector rents are rising at fastest rate for seven years
T
enants in properties owned by private landlords have faced the highest annual rise in their rent since comparable records began
seven years ago, official data shows. Rents rose by 4% last year as landlords, who face
their own squeeze from higher mortgage rates and increases in council tax, repair bills and utilities, passed on these costs. A quarter of private tenants surveyed in
December said their rent had risen in the previous six months, the Office for National Statistics (ONS) said: “Renters proportionally spend more on housing costs than owners do. On average, they pay 24% of their weekly expenditure on housing compared with 16% by those with a mortgage (based on the latest figures from 2021)”. An even more dramatic picture was revealed
in an insight into the rental market from private landlord Ocasa, which revealed that across the UK, the average rent has increased by 10.8% over the past year, rising from £1,060 per month at the end of 2021 to £1,175. Tenants are being hit hardest in London
where the average rent has increased by 14.8%, from £1,752 per month to £2,011. Scotland has also experienced higher than average price growth at 14%, rising from £738 to £841 per month. Te smallest rent increases were reported in Yorkshire and Humberside where prices grew by 7.2% from £737 per month to £790. Sales and marketing director at Ocasa, Jack
Godby, commented: “Rents are increasing because landlords are passing on the additional costs they’re dealing with due to the cost of living crisis, not least
the soaring price of energy. On top of that, rising mortgage rates means many landlords are being forced to up their prices to avoid making a loss on their investments.” “And as if that wasn’t enough, many high street
lenders have removed their buy-to-let mortgage products from the shelves which means landlords
can’t get finance for new investments which, in turn, means rental stock is dwindling while tenant demand remains strong.” A growing proportion of people told the ONS
they were finding it difficult to afford their rent or mortgage payments, rising from 27% in late September to 31% in mid-December.
Rental reform plans risk causing chaos in student housing market
Students face chaos as Government plans to reform the rental market threaten to cause widespread uncertainty as to whether housing will be available at the start of each academic year. Under the plans, included in the Government’s
Rental Reform White Paper, all student housing, with the exception of purpose-built blocks, will be subject to open-ended tenancies. Tis move means landlords are unable to
guarantee that accommodation will be available for the start of each academic year, unless sitting tenants have handed in their notice to leave. Students looking for housing will be unable to plan in advance where and with whom they want to live. New data from the National Residential
Landlords Association reveals that 84% of landlords renting to students are concerned about the Government’s plans. One landlord told the NRLA: “I let solely to
students. Te end of fixed term Assured Shorthold Tenancies will bring chaos. We will have no guarantee that existing tenants will leave and therefore won’t be able to let properties in advance.” According to official data, over a half (53%)
of students in the UK in rental properties do not live in halls of residence or other university provided accommodation With the Government having made clear that
private purpose-built student accommodation will be exempt from plans to make every tenancy open
18 | HMMFebruary/March 2023 |
www.housingmmonline.co.uk
ended, the NRLA has called for the same to be applied to all types of student housing. Under the NRLA’s proposals, student landlords
would be able to repossess a property with two months’ notice where it is required for new students each year. To provide protections, the earliest such notice could be served to sitting tenants would be in the last two months of a tenancy agreement, or at the 10th month of a 12-month fixed term. Ben Beadle, chief executive of the NRLA, said:
“Te student housing market works unlike any other, operating from one academic year to the next. It is common sense that landlords should have certainty that accommodation can be made available for new students each year, as has already been reflected for the Purpose-Built Student Accommodation sector” “Without changes the Government risk
causing chaos, confusion and anxiety for students unable to plan where they live for the start of each academic year.”
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