There are fears that the rental market in the UK is overheating, as the average rent is now 10% higher than just one year ago. The Financial Times reports that increased demand, slow turnover, and landlords passing increased cost onto tenants, is causing rents to soar, especially in bigger cities in the UK.
There is no obligatory cap on the amount that landlords can raise established rent prices, other than guidance that increases “must be fair and realistic, which means in line with average local rents”. However, even in regional northern cities such as Newcastle, average monthly rents have shot up from £450 a month to £600.
There are similar problems in Cardiff and Manchester, where average rents are 36% and 27% higher respectively. The Guardian reports that according to PropertyMark, the trade membership organisation for estate agents, letting agents are receiving an average of 127 applications for every 11 properties available to rent.
PropertyMark recently commented on reforms to the rental sector which are proposed by the government, including revised grounds for repossession and the decision not to introduce rent controls.
They largely welcome the proposals, but warn that a balance needs to be struck between the interests of tenants and landlords, to avoid causing landlords to sell up, thus depleting the pool of rental homes available any further.
The organisation comments: “There are elements of the proposed reform that if progressed will create further risk and our member agents say they have seen enough to convince some of their landlords to sell up or indicate an intention to. Our research shows many properties sold off by landlords are not returning to the rental market.”
They also warn that more changes which disadvantage landlords may lead to even higher rents and less properties available, which will in turn place more pressure on local authorities and housing associations.
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