Britain’s tenants are feeling much more pressure from soaring interest rates than the rest of the housing market.
Rents are set to rise 25% over the next four years as landlords pass on extra costs from pricier mortgages and tougher regulation, according to a report from broker Hamptons International. Meanwhile, house prices — which are declining at the fastest pace in 14 years — are set to drop 5% over the same period when adjusted for inflation, Hamptons said.
The average rent on a newly-let property in Britain will rise 8% over the course of 2023, according to Hamptons, before climbing a further 17% by the end of 2026 as more landlords roll off fixed-term loans and move to costlier deals. There were 43% fewer homes available to let across Britain in July compared with the same month in 2019, giving landlords more power to haggle for higher rents with less risk of losing tenants.