Housing rents in Britain are heading for calm next year
The average annual increase in rent for newly rented homes in the UK is set to slow to 5% by December 2024, down from almost 10% last October, according to British real estate agency Zoopla.
According to the agency, pressures on affordability of living in Britain have begun to ease demand for rentals.
According to its report, the agency believes that rent growth is on track to rise by only 2% by the end of next year, which is the lowest annual increase since 2021.
“The slowdown in rent growth in 2024 will be due to a weak labor market, slower earnings growth and increasing affordability pressures, which will limit the pace of rent rises, especially in the south of England,” Zoopla CEO Richard Donnell told Bloomberg.
UK households are facing pressure on multiple fronts, caused by high mortgage interest rates and the worst cost of living crisis in a generation.
At the same time, renters are bearing the brunt of the disruption, as landlords, whose mortgages are exposed to rising interest rates and are distressed, either sell or raise rents to deal with the additional costs.
The resulting pressure on tenants’ finances causes a decline in demand. The average number of inquiries for a home to rent in the UK fell to 17 last month, compared to a peak of 45 in September 2022.
Fewer than 10 potential tenants inquired about London rentals in November, compared to 18 the previous year.
Bloomberg says this means that some landlords have returned to pricing their rents more realistically.
The share of UK homes requesting a rent reduction rose by more than 5% to 7.2% last month from around 6% a year earlier, according to Zoopla.
Furthermore, the report said that one in 10 landlords have reduced at least 5% of their asking rent in London.
There was a 43% drop in available rentals in the UK during the first 10 months of this year compared to the same period in 2015, according to a separate report by Hamptons International.
2023-12-12 17:10:07
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