Rising Rents & Increased Homelessness
Today there have been a range of statistics released on the private rented sector, mortgage lending and homelessness which confirm a fairly gloomy picture for those stuck privately renting.
The Council of Mortgage Lenders have reported that there was an increase in first-time buyers – up 12% from September to October 2014 – which is positive for those who have managed to raise that hefty deposit. RICS have noted that there has been a marginal decline in overall house sales and an easing in national housing price inflation, although as we noted last week, this is likely to pick back up again following the Autumn Statement announcement on Stamp Duty. With sellers realising that buyers will have more cash in their pockets with lower Stamp Duty, house prices will be driven up once again.
For the many of us who cannot afford to buy, the picture isn’t looking too great. There has been a reduction in new lettings coming onto the market, according to RICS, and there is still high demand for properties from tenants. This is keeping the rents high; although Countrywide’s Monthly Lettings Index found rents to have dropped slightly between September and November – due to seasonal variation allowing for greater negotiation between landlords and would-be tenants – it confirmed the general trend of rising rents with the cost of a newly agreed let being 3.1% higher than last year.
There is more bad news for renters; respondents to the RICS survey are predicting at least 2% rises over the next twelve months. One agent even commented that 3% rent increases were being secured on renewals. But where does this leave tenants who can’t afford these rent rises?
Well, the DCLG has also released their homelessness statistics which state that the most frequently occurring reason for the loss of the last settled home was the ending of an assured shorthold tenancy. 29% of all acceptances of homelessness by local authorities were due to the ending of tenancy by a private landlord, rising to 38% in London.
It isn’t all doom and gloom, however, make sure you read our latest publication on rent control with Diane Abbott. Stabilising rents and therefore ensuring that people can stay in their homes is in the interest of local authorities that have to foot the bill when households are made homeless. Furthermore, our proposal would allow landlords to charge rents above the cap but pay a surcharge to do so that would be invested into social house building, thereby also bringing down market rent prices. If you agree, you can also sign the petition in support of rent controls here.