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Tenants expect further rent hikes

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  • 22/11/2010
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Tenants expect further rent hikes
Four out of ten tenants expect the cost of renting a home to continue rising during the coming year as supply fails to keep pace with demand, a survey has shown.

Research by Rightmove.co.uk showed that 42% of people living in rented accommodation are bracing themselves for further rent hikes, with 11% expecting increases of 10% or more.

However, the problem has been compounded by a lack of supply. Rightmove revealed that the number of rental properties advertised on its website has fallen by 23% during the past year.

People’s expectations of further rent rises followed research by LSL Property Services which showed that the cost of letting a home has hit a record high, while Rightmove said some agents had reported increases of 10% during the past year.

Anecdotal evidence has also suggested there have also been cases of rent gazumping in some areas, as would-be tenants battle against each other to secure a place to live.

Rightmove said that demand for rental accommodation has increased in recent months as potential buyers have put plans to move on hold due to the problems in the mortgage market or until the outlook for house prices becomes clearer.

But landlords have been unable to respond to the rise in demand because they are also struggling to raise finance.

Miles Shipside, director of Rightmove, said: “For the second consecutive quarter more than 40% of renters are revealing their fears of another upwards movement in rents.

“They are at the sharp end of competitive demand from other renters, experiencing a struggle to find suitable rental accommodation and losing out on properties to higher bidders.”

He added: “Rental agents are reporting turning many prospective tenants away, with only those with the best references passing the beauty parade to get to view the limited new stock on offer.”

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