Almost half of renters forecast rents will keep on rising to create the fifth consecutive quarterly increase, producing rent payments 12 points higher than a year ago.
Rental stocks continue to dwindle by 20% year-on-year, according to agents, driving up higher rents, while 57% of renters say they want to buy but have been priced out of the market.
Miles Shipside, commercial director of Rightmove, said: “Many renters are caught in a ‘rental market crossfire’, taking financial hits from all directions. Perversely, this survey shows that it is renters themselves who are calling 2010 the ‘Year of the Landlord’, and it looks set to be true of 2011 as well.”
Shipside said the mortgage famine has meant fewer can buy, but the squeeze on incomes and the increased costs of living will put a ceiling on what many tenants can
afford to pay.
Rightmove said the lack of funding for house purchase also affects landlords, but the economic factors supporting the buy-to-let market could persuade those with access to funding to expand portfolios.
However, the increase in Capital Gains Tax announced in the recent budget may have dissuaded some investors from the property asset class.
Shipside said: “With some landlords put off by lack of access to finance or greater tax-take, those investors who can buy more are looking at improving returns and less competition. With a tougher sellers’ market forecast for the second half of 2010, investors may see the opportunity for a win-win situation as the cost of buying falls and rents increase.”
Demand for private rental accommodation will only increase if better off council tenants are forced out of council houses and into the privately rented sector, said Rightmove.
