LONDON / MUNICH (IT BOLTWISE) – Rent prices in the UK continue to rise rapidly, pushing inflation for renter households to higher levels. This development has far-reaching implications for the housing market and the financial burden on tenants.
In the UK, renter homes are currently experiencing unprecedented inflation, which reached 3 percent in September. For the first time, this rate is higher than the rate of inflation for households with mortgages, which is 2.6 percent. The increase in rental prices is driven by rising house prices and a reduced supply of rental housing, which significantly increases the financial burden on renters.
The latest data from the UK’s Office for National Statistics (ONS) shows that the cost of living for private renters has increased by 3 per cent compared to last year. This is the first time since comparative data began in 2022 that the inflation rate of rental households has exceeded the rate of households with mortgages. This improvement is largely due to an increase in rental prices, which rose by 8.7 per cent in the year to October.
In contrast, homeowners without a mortgage recorded an inflation rate of just 1 percent, while retirees recorded a rate of 1.1 percent. All households combined had an average inflation rate of 2 percent. These differences make it clear that inflation does not affect all population groups equally, as Sarah Cumbers, CEO of the Royal Statistical Society, says.
The rent burden for new tenants reached 30 percent of average income in October, the highest level since 2017. This increase is due to the increase in house prices from 2020 and the increase in costs mortgage in 2023. These factors have led to more people being pushed into the rental sector, while the supply of rental housing is decreasing due to rising costs.
In contrast, mortgage rates have been falling since peaking in the summer of 2023 when the Bank of England cut its base rates. This development could lead to relief for mortgage households in the long term, while tenants continue to face rising costs.
Cost of living inflation was 1.7 per cent in September and is different from consumer price inflation, which shows the average amount of goods and services that every household in Britain consumes. Wealthier households experienced inflation of 2.5 percent this year, while poorer households only suffered a rate of 1.4 percent.
Notice: Parts of this text may have been generated using artificial intelligence.
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2024-11-28 22:01:00
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