Copy article

"Rents in the capital are not for the fainthearted"

ended 15. January 2025

Average UK private rents increased by 9.0% in the 12 months to December 2024, down from 9.1% in the 12 months to November 2024 according to official data published this morning. In England, rents inflation was highest in London (11.5%) and lowest in Yorkshire and The Humber (5.4%), in the 12 months to December 2024. Meanwhile, average UK house prices increased by 3.3%, to £290,000, in the 12 months to November 2024, up from 3.0% in the 12 months to October 2024. Newspage asked property and mortgage m,arket experts for their views, below.

6 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
This latest data continues to demonstrate the resilience of house prices, as demand remains stronger than expected despite all the misgivings surrounding the economy. Rents are still climbing to levels where tenants may need oxygen, putting further strain on many households. With the impact of the Budget still largely to come in April, arrears on both mortgages and rents may well skyrocket in the coming months.
Star Quote
Copy

Jonathan Moser
CEO at Mo'Living
Rents in the capital are not for the fainthearted. That's crystal clear in this data. Sadly, the Renters Reform Bill is applying further upward pressure on rents as many landlords switch their properties into short-term lets ahead of the abolition of Section 21. This is removing even more stock from the market, which is the last thing it needs when supply is already so low. It's also a myth to believe that those properties being sold by landlords exiting the sector are being snapped up by first-time buyers. In reality, professional portfolio investors are simply adding to their portfolios. With mortgage rates once again heading north, especially given the volatility in the markets over the past week or so, this is a further challenge for landlords looking to remortgage. Leveraged landlords have no option but to pass on those increases to their tenants. While rents in London are a challenge, the one positive is that properties today are far better managed and more professionally run.
Copy

Editor
Simon Bridgland
Broker at Charwin Private Clients
Strong growth in house prices will continue to be reflected in Land Registry figures for a few months yet but in real world terms these numbers are out of date and do not paint a true picture of how the property market really is today. Demand for property was relatively strong last Autumn and at the tail end of last year and there was no cooling of house prices. Prices in many regions any are being further supported by buyers eager to beat the stamp duty changes coming at the end of March. However, the Chancellor's disastrous Budget, made worse by her refusal to reverse the damage, has caused turmoil in the markets and caused mortgage rates to rise, creating countless affordability issues for borrowers. Todays flat inflationary figures will continue to cause issues for our Chancellor giving only a cautionary pause in pressure for her and will undoubtedly have a cooling effect on the property market, leading to lower prices, and further stress on the already reeling rental sector.
Copy

Editor
Andrew Montlake
CEO at Coreco
There was still momentum in the property market in the Autumn caused by competitive mortgage pricing over the summer. The looming stamp duty deadline was also driving a number of transactions. But that was then and this is now. Many had expected a buoyant start to the year but the bond market sell-off has injected renewed uncertainty into the market. It wasn't the start to 2025 that many were hoping for but this morning's inflation data has boosted the chances of a base rate cut at the next Monetary Policy Committee meeting. That offers a glimmer of hope.
Copy

Editor
Ben Perks
Managing Director at Orchard Financial Advisers
Surely part of the reason for expected increases in property purchases this year is the eye-watering rental increases. If you can scrape a deposit together, buy. It’s cheaper than renting. For those in the capital though, buying is a pipe dream and renters are held to ransom as the knock-on effects of costly buy-to-let borrowing take hold.
Copy

Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
House prices have once again shown their resilience while average rents, though down very slightly, remain high. The lack of supply is a key contributor in both cases. Of course, this data does not reflect the volatility of January and shows how quickly things can turn. The ongoing pressure on tenants is not being helped by many amateur landlords continuing to exit. That's compressing already meagre supply.