Can rents go up indefinitely?

Affordability limits have hit critical points in various UK regions, signaling a diverse landscape in the rental market. While Scotland and the north-east of England boast staggering annual rises at 18.0% and 11.1%, respectively, the south-west experiences more modest increases. In Greater London, the annual rent growth is a mere 1.8%, a stark contrast attributed to a significant year-on-year increase in supply. Eight prime boroughs are witnessing year-on-year falls, contributing to the all-Britain yearly rise dropping from 9.7% to 6.1% in just a month.

Despite these challenges, Home emphasizes the enduring strength of the rental market, acting as a vital support for the sales market. The high demand for rentals proves profitable and quick, offering a compelling alternative to selling, while the escalating rental costs fuel demand from homebuyers and investors alike, resulting in a 49% increase in rents across Britain in the last five years.

In the sales market, prices experienced a seasonal dip of 0.6% in October, aligning with expectations. The total stock of unsold properties also decreased towards the end of the year, indicating a typical market trend. Home asserts that, despite higher borrowing costs, the current market mirrors pre-Covid years, especially in 2018 and 2019, showcasing similarities in price movements and stock levels.

As we delve into the market’s nuances, the lower typical time on market for unsold properties and tighter supply suggest a more robust marketplace. This resilience indicates potential for greater price support, offering insights into a market that echoes patterns from the pre-pandemic era.

If you own property and are interested in exploring the potential of letting it, our expert team specialises in property management can guide you through the process. Contact a member of the team today to discuss your property letting needs and how Coapt can assist you in tapping into this thriving market.