Today I wanted to chat about what is driving rental prices. As letting agents we often get blamed for the increase of rents. People are struggling, homeowners and tenants alike with rising costs linked to inflation and interest rates and many wonder when and where will it all end.
As an ethical letting agent, we have to balance this. Landlords have rising costs but equally many tenants are feeling the pinch. Most rental properties still receive over 25 applications and applications come from all walks of life, with different backgrounds and different circumstances. Demand is still outstripping supply.
As a responsible agent, we have to ensure affordability checks, none of us wants to put anyone into debt and we also have to check house suitability – for example we once had a family of 4 apply to rent a 1 bed apartment.
The problem the Uk is currently facing, Lancaster and Morecambe included is a shortage of properties. In the ideal world of many, the government should build these homes, after all, housing is a basic need, however until something drastic happens, our property shortage looks set to continue.
Compared to many parts of the country, Lancaster and Morecambe are still affordable areas to rent. The average rent in the northwest is now £1067, whilst closer to home it is £791.
Here are some concerning facts…
- Almost one in six rental transactions in 2023 have been agreed at above the asking rent, compared to less than one in 15 in 2019.
- The situation is most marked in London, where 30% of rentals agreed this year were above the asking price
- In the wider South East, 14% of new rentals were settled above asking rents and more than 10% in 4 other UK regions: East of England; North West; South West and Yorkshire & Humber.
- Demand for rental properties has been outpacing supply since the pandemic across most of the UK. Average monthly rents have risen 41% since 2019 – compared to house price growth over the same period of 25%.
I wanted to share this data so everyone understands the situation in the rental market. At JDG we will continue to try and balance out this growing problem of rental prices v affordability.
Thanks for reading and if you have any questions, please just get in touch.
Josh
