So, after all the billions that the population of the UK has collectively poured into property over the last decade or so we find ourselves with too little to go round, house buyers priced out and rents rising faster than inflation. What a ludicrous position to be in.
The latest residential lettings market survey from the Royal Institution of Chartered Surveyors shows that the cost of renting a property has risen 4.3% over the last twelve months and its members expect them to increase by another 3.9% over the next year.
RICS does say though that the spurt in growth seen over the last few years is beginning to slow.
RICS says that the cause for this is the mix of shortages of good quality properties that are available to rent while demand continues to expand and a lack of mortgage availability coupled with the large deposits now required by lenders.
On a more regional basis Wales saw rents remain broadly level but the North West experienced rises of 6.9%.
RICS Global Residential Director, Peter Bolton King, said in their statement “It is interesting to see that the huge growth we have seen in demand in recent years has started to gradually slow. While tenant interest is still riding high, what remains to be seen is whether many are willing to meet the increasing rents being demanded by landlords.
“However, it is clear that we have seen rents grow steadily right across the UK for some time. This is partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders. These barriers to home ownership need to be addressed alongside the shortage of new stock coming to the market.”
This has led to landlords’ rental yields to rise and 3.3% fewer of them are selling properties when tenancies end says RICS.
We therefore have a situation where rents are rising not because costs are going up or that housing standards are increasing but just because there are fewer and fewer homes for people to live in so more profit can be made from each unit. It looks like many people will be forced into smaller accommodation of questionnable quality. Welcome to the UK of the 21st Century!