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Demand for rental homes in UK up by 23% in a year, as rents hit record high | Renting property

Research has found that demand for rental homes across the UK has jumped by almost a quarter in one year, adding pressure to an overcrowded market and driving record private rents even higher.

The number of people inquiring about homes for rent was up 23% this time last year, according to real estate website Rightmove, driven in part by some prospective buyers who have put their plans on hold in hopes that mortgage rates in the area will drop. New Year.

This, in turn, has led to an increase in the amount of fees landlords charge, with separate research from London estate agent Foxtons reporting that rents in the capital in the first nine months of this year have risen by 22% year-on-year, with average rent right Now. At a record price of £571 per week.

Read:Annual UK house price growth slowed sharply in June, ONS data shows | House prices

However, the cost and availability of mortgages has begun to stabilize after two turbulent months after the Liz government’s mini-budget sent the gears of chaos into the market, with indications that rates could fall further next year.

The two-year average fix has fallen from a peak of 6.65% in late October to 6.12% now. Meanwhile, the five-year fixed rate average this week fell below 6% for the first time since the mini budget, according to Moneyfacts, and is now at 5.92%.

Rightmove has warned that mortgage rates will stabilize at a higher level than buyers have become accustomed to in recent years. The Bank of England is expected to raise its base rate to 4.25% by next spring, although this is lower than previously feared.

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First-time buyers have been hardest hit by the jump in mortgage rates, especially those who are already under financial stress.

They are likely to find competition for a suitable rental home more fierce than they are in the sales market, Rightmove said, and the selection more limited. The number of smaller rental homes available — studios, one- and two-bedroom properties — is down 4% year-over-year, while in the sales market it’s up 13%.

Christian Balchen, real estate expert at Rightmove, said: “It is very frustrating for a lot of people in the rental market, with demand so high. The number of ambitious first-time buyers who have now had to resort to the rental market is compounding the situation. We are seeing more properties come to market, but there is not enough room to meet the demand. “.

Amardeep Lall, Head of Lettings at Manning Stainton, a property agency in Leeds and West Yorkshire, said: “Since the pandemic began, there have been far more tenants looking for property than homes available to rent. This means it has become very competitive among tenants to secure viewings and properties. , because there are just too many viewings for us to book in.”

Read:Forced sales fear as mortgage rates rise | News

Until the pandemic, rents had closely tracked earnings, with rent growth averaging 2.5% annually since 2005 and earnings up 2.4%. According to research published by Rightmove last month, advertised rents have jumped more than the capital in some other cities and towns including Newbury, Manchester, Cardiff, Edinburgh and Birmingham.

“The impact of returning to the city post-Covid has been acute,” said Foxstones. “While history suggests that the rental market will correct for profits, the basic balance between supply and demand could be squeezed by an influx of foreign students and businesses who are not dependent on personal earnings.”

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