Rents on the up
February 25, 2022
"London rental market descends into Wild West of bidding wars". This headline from a recent Telegraph article describing rental prices highlights a growing trend across the country. Rents are going up!
The capital suffered from a significant drop in rental demand during the Covid period as people were forced to work from home and many looked outside of our big cities for new homes. This drop in demand within the cities resulted in rents falling by more than 30% in some instances as landlords adjusted prices to get tenants.
Now that many people are returning to offices, even if only for a couple of days a week, there has been a clear change in demand for rental properties. Maybe it is the stark reminder of the pain of commuting or simply the human need for company. More and more people are now seeking city properties. In addition to those people that managed to extract themselves out of the city during Covid and are now migrating back, as the job market soars, there is a whole new contingent of younger folk flocking into the cities.
Another recent news report from Sky News mentions that "the price of an average home has increased almost twice as much as the wages of the average UK worker over the past fifty years". This means it is harder to get on the property ladder and as a result more people will need to rent.
With the Bank of England's recent interest rate increase, and potentially more on the way, energy bills going up, inflation going up, and now rents going up, the cost of living is going to have an impact on people's ability to get onto the property ladder. So even those buying will be renting for longer.
When you also factor in the mass exit of landlords from the buy to let market, largely driven by poorly thought-out government policies and increasing taxes on rental income, there is now even less rental property available as demand soars.
Lack of rental properties, increasing demand for rentals, and rental yields going up mean demand for investment property is increasing.
At Vesta we have been inundated with buy enquiries from a wide range of buyers including individuals, funds, and institutions.
If you are considering selling or buying an investment property or simply want an investment valuation, please get in touch, or visit www.vestaproperty.com/sell so we can start the process with you.
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