Rents to continue going up
June 14, 2011
A recent report that has been released by the Royal Institute of Chartered Surveyors has shown that rents in the private sector are continuing to rise, which could result in many non-homeowners being frozen out of the property rental market as well as the mortgage market. For some time, first time buyers have been struggling to get a mortgage in the current climate and many have had to turn to private rented properties. However, this soaring demand for rental homes has driven prices up to a point where some people may no longer be able to afford the rent on a property.
The figures from RICS showed that in the three months to the end of April there were 42 percent more surveyors that saw an increase in property rental prices compared to those that saw a fall in prices. The figures also showed that there were 33 percent more surveyors that were expecting property rental prices to continue rising over the coming months compared to those that expected them to fall.
In April property rents reached a record high, with the average rent reaching a staggering £692 per month. In London and the south ease the property rental price hikes have been even more severe. Many people that are unable to get a mortgage to purchase could find themselves in a very difficult situation if they are also unable to afford rent.
An official from RICS said: “Although we are beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market. There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise.”
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