UK rents set to soar another 18% over five years – as landlords leave

I think it rather depends on inflation.

Labour’s first budget was inflationary. We won’t see the full impact for around a year to 18 months, as the cost of employing people really takes its toll.

I’d be most surprised if inflation was less than 18% over 5 years.

High inflation means high interest rates. I anticipate the BofE could raise base rates to near 8%+ at some point over the next 5 years with devastating effects on the economy and mortgage rates.

And, of course, we have the war on landlords which will see many more (landlords) try to exit the sector. Me included - if it isn’t too late already.

Fewer landlords means fewer rental properties and with extraordinary high demand set to continue, the lack of supply will allow rents to increase above inflation in many areas if the U.K.

Rent controls seem inevitable (to protect Labour’s vote). However, this may simply increase the speed of the downwards spiral for the housing sector.

And Labour will NOT build 2.5 million homes by 2029.

While common sense seems to have been bred out of most it’s obvious that less supply will always equal higher prices unless prices are fixed or capped. It’s not rockets science!

Limited supply of housing allows landlords to be more selective. This leaves lots of more vulnerable people at the mercy of social housing and poor quality private rental sector housing.

I don’t think (the lack of supply) pushes up prices as much as changes to the tax system and legislation.

Nonsense if the tenants can't afford it they wont pay it can't pay it

I would imagine it will be more than 18%.
Firstly Social rents increase by CPI + 1% each year. I can't see the PRS increasing by less. The budget was hugely inflationary, therefore CPI is likely to be much higher than this September's 1.7% for the next couple of years.

Interest rates are predicted to stay higher for longer, so more and more BTL mortgages will roll onto higher rates. These increases plus the additional Section 24 have to be incorporated into the rent.

Some of us are still playing catch up with the utility price rises after all the small utility companies went bust and mortgage increases over the last 18 months. We are filtering those cost rises in over a number of years instead of as they happened.

Even if landlords weren't selling at a rate of knots we are getting old and a number of us will die each year. I can't see many of our children wanting to become landlords, so supply will naturally shrink.

The additional 5% SDLT means virtually nothing in the South is viable to buy. Even if we could stomach more tax raids and abuse nothing stacks anyway. So a very limited new supply.

100% agree Jo. As I am in London and average property price here is £500000. I can't see the point of buying with a extra 5% stamp duty so supply in London will get worse rapidly. Labours budget will an extra 0.5% to interest rates/ mortgages for longer than they should be but if rents go up more than18% then we have Labour to thank!!!

The government says there is no "exodus" of landlords.

But they fail to realize there are lots of landlords like me, who have just stopped buying property.

And who are not going to be taking on any more tenants.

When my current tenants leave, I will not be replacing them, the properties will be sold.

So even though I dont show up on "exodus" statistics, over the next few years I will be out of the business.

There are loads like me, and its going to put a massive strain on people looking to rent going forward.

Reply to the comment left by Jimmy Smith at 20/11/2024 - 10:21
"Nonsense if the tenants can't afford it"

Affordability is part of tenants referencing so many more prospective tenants will not pass reducing the demand closer to the supply.

Aspiring tenants will have to continue living with their parents because they can't afford to rent.

They will have Labour to thank for reduced social mobility as will prospective employers. Commuting to work has a cost too.