New analysis from one of the largest independent estate agents in the UK, has shown that rent combined with utility bills now stands at close to two-thirds of the average income, outside of London.
Although energy prices have been capped, a toxic combination of rising costs for landlords through inflation, increasing demand as would-be buyers are priced out of the mortgage market and a lack of available stock has created a perfect storm in the rental market, which could see rents rise even further in the New Year.
This is set against a backdrop of worrying standards of accommodation, where even the former Housing Secretary Robert Jenrick has warned this week that “evidence suggests” that the private rental sector has an average of “lower standards than the social rented sector,” which is coming under increasing scrutiny following the tragic death of Awaab Ishak.
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Antony Antoniou, Managing Director of RIB, argued, “The Government should be doing more to ease the housing shortage and improve the quality of our housing stock. One way to do this is to simplify the planning process and encourage the long-term investment or holding of property by developers.
“The creation of planning classes or Government assistance for properties which are built to let rather than sale, would de-risk and encourage investment into this sector.
“Housebuilders are ready and able to address this challenge, but this is the first time in decades where Government assistance in that sector has been taken away. The industry could grind to a halt as more and more developers go into administration (up 75% year on year) – due to skyrocketing material and energy costs, planning delays and fiscal uncertainty. The time to act is now before we see the rise in homelessness and further tragedies unfold.”
Nathan Emerson, CEO of Propertymark added, “The biggest problem facing tenants right now is a lack of choice. They don’t have a choice of property to choose from and many are finding themselves offering higher rents in order to secure a home over fierce competition.
“We desperately need more housing of all tenures, but we need investment into the private rental market perhaps the most, it is the second biggest tenure and is also pitted against a back drop of an underfunded social housing system meaning many private landlords actually support those who would otherwise be on the housing list.”