Private rents are continuing to push higher according to a survey from the Royal Institution of Chartered Surveyors (Rics). The letting business is one of the areas of industry that is actually increasing in economic wealth.
Demand from tenants, especially from those who have had trouble purchasing their first homes due to the higher costs of deposits for mortgages for first-time buyers. This means more people want to rent homes than there are homes available.
Additionally, those on housing benefit are 13% of new lettings, most likely due to the lowering standards of living seen across the nation. This is the highest level of those on housing benefit since the survey began in 1999. According to Rics, this is due to the “challenging” state of the economy.
Further increases are likely to continue as well, with mortgages still too high for first-time buyers to break into the market. With housing prices dropping and rising all over the place, the market is slightly unstable, or at the very least, challenging as well.
The survey was for the three months until July, and was based on information from 156 members of Rics who also are employed as letting agents. This news comes as information about the housing market says it will become a “crisis”. An under-supply of housing in the sales market means younger, first-time buyers are priced out of the market.
In addition, they move to the rentals market, which is also in short supply. The government is investing £4.5 billion in lower cost homes, but according to the National Housing Federation (NHF), this is still a cut of 63%. It is possible that the number of new homes built last year is the lowest since 1923.
However, the government has also proposed programmes to increase commercial residential housing. This hopefully will increase the amount of people renting privately, without relying on government funds or housing benefit. This is great for the government, which will have less money to pay, but not as good for those who need the support in order to afford rent in the first place, especially with the higher amounts being charged all over the country.