The cost of renting a home in the UK has risen by over 4.3% in the last year, according to the latest Residential Lettings Survey from the Royal Institution of Chartered Surveyors (RICS). The increase has been put down to the fact that many would-be buyers are struggling to buy as they are locked out of market.
With the well documented problems in the property sales market the RICS says that this trend looks set to continue as respondents also predict rents to continue to grow by 3.9% over the next year. The scarcity of mortgage finance is still creating a barrier to buying leaving people with little option but to rent.
Behind the rise in rent is the shortage of good quality properties for tenants to move into. In the three months to July, the amount of new properties coming on to the market was little changed compared with the preceding period.
Significantly, the increase demand has outpaced the change in supply in every quarter since the first half of 2009 although the gap does now appear to be narrowing.
This leaves the question, ‘will tenants continue to be able to afford the rising rents?’ and should landlords be prepared for a rise in rental arrears?
You can protect yourself from rental problems with rent guarantee insurance. See Landlord Insurance for more information.
