Londoners face unprecedented rent increases in 2023 as mortgage rates for landlords skyrocket
Tenants are struggling this January. Along with the rest of the nation, they’re dealing with a cost of living crisis, driven by rising energy prices, and adding to this pressure is the rising price of rent.
Moreover, landlords face unprecedented increases in mortgage rates, forcing them to up the rent.
Tenants in London have endured bigger rent price increases than anywhere else in the UK since late 2021.
Across the UK, the average rent price has increased by 10.8 per cent since last Christmas, rising from £1,060 per month at the end of 2021 to £1,175.
Perhaps not much of a surprise, tenants are being hit hardest in London where rent has increased by 14.8 per cent which means rent has grown from £1,752 per month to £2,011.
This pounds and pence increase of £259 is the biggest in the UK., according to the latest insight into the UK rental market from Ocasa.
Scotland has also experienced higher than average price growth since last Christmas with the average rent rising by 14.0 per cent, from £738 per month to £841.
Meanwhile, the smallest rent increases are being reported in Yorkshire and the Humber where prices have grown by 7.2 per cent from £737 per month to £790.
Prices in the East Midlands have also seen low growth, increasing by just 7.3 per cent, while in the North East rents have grown by £47 per month which is the smallest pound and pence rise in the UK.
“Rent prices are increasing because landlords are passing on the additional costs they’re dealing with due to the cost of living crisis, not least the soaring price of energy,” said Jack Godby, sales and marketing director at Ocasa.
“Rising mortgage rates means many landlords are being forced to up their prices to avoid making a loss on their investments.”!
Jack Godby
“And as if that wasn’t enough, many high street lenders have removed their buy-to-let mortgage products from the shelves which means landlords can’t get finance for new investments which, in turn, means rental stock is dwindling while tenant demand remains strong,” Godby continued.
“It’s going to be a difficult Christmas for many tenants, but there is definitely hope that 2023 will bring some relief to the situation, as the cost of living crisis dissipates.”
“However, until the dangerous imbalance between rental market demand and stock supply is properly addressed and remedied, it’s the nation’s tenants who will continue to suffer from the ever increasing cost of renting,” he concluded.