Rent

Generation Rent? Your Payments Are Set To Soar!

The demand for homes has declined for the first time in over a year as people rushed to beat the stamp duty deadline – but house prices continue to rise and so will your rent!

What’s been going on?

New figures released today have revealed there has been a decline in new buyer inquiries for the first time in over a year as many people, rather sensibly, brought forward their property purchases to beat the hike in stamp duty.

Surveyors in most parts of the UK have reported a there has been much less interest from home buyers, an incredible net balance of 22% reporting a drop in new buyer inquiries.

How will it affect me?

Unfortunately, according to the Royal Institute of Chartered Surveyors, due to a shortage in available homes on the market it means that house prices are still set to continue rising. We can expect house price rises of between 3 and 5% over the next five years. Not good news for first time buyers and not much better for the rental market either, as landlords pass on the extra cost to their tenants – estimated to be 3.4% inside the next twelve months.

If you exclude London, the average UK rental cost at the moment is £764 per calendar month, meaning over the next year that is expected to rise to around £790.

Doesn’t sound much? This might change your mind!

As previously mentioned, the average rental price right now is £764, this is already 5.1% higher than the same time last year – £728. Meaning with the predicted increase in the next year, your rent will have risen by around 8.5% over two years, a huge increase.

Since the same period last year, eleven out of twelve regions in the UK have seen rental values increase. Only the North West has seen a reduction in rental values (-1.0%) over the last ten months. – credit HomeLet rental index

Possible solutions

If you are renting from a private landlord you could try negotiating with your them to see if they will offer you a two year contract when it comes to renewing your tenancy. It may fall on deaf ears, but it’s worth asking. They are guaranteeing a tenant they trust, whilst you guarantee your rental costs for two years. Make sure anything you sign is water tight so you don’t face any unpleasant surprises.

You could also look to slim down your outgoings and start saving the excess away for a deposit of your own. There are many schemes available to you such as the Help to Buy ISA, the Help to Buy scheme, as well as the newly released Rental Exchange scheme. If house prices are set to continue to rise over the next five years you could see a nice return on your investment, and let’s face it, it’s better than paying your landlord’s rent for them.

How do you plan to deal with the increase in rental costs?

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