Yahoo Finance Rent increases to slow as ‘accidental landlords’ flood the market
Britain’s rental crisis is forecast to ease in 2024 after the depressed housing market prompted a wave of “accidental landlords” to put their properties up to let.
Estate agent Winkworth said it expected rent increases to slow this year as an increase in supply puts downward pressure on prices.
Renters have more choice as homeowners put off selling their properties in a weak market and instead turn to renting them out.
An increased number of so-called “accidental landlords” will give tenants more options and should reduce the power of landlords to raise rents, Winkworth said.
Many tenants are also hitting the limit of what they can afford when it comes to rent increases.
The company said: “We believe that the rise of accidental landlords, postponing their sales due to price uncertainty and switching to the lettings market, combined with tenants hitting affordability ceilings, will lead to… slowing rent increases.”
Private rents paid by tenants in the UK rose by 6.2pc last year and 6.9pc in London, according to official figures. Housing costs surged as landlords passed on the cost of higher interest rates to tenants.
The rapid rise in borrowing costs has also depressed the property market, weighing on house prices and transactions.
Winkworth’s home sales fell by 19pc in 2023. Many people who were hoping to sell their properties have instead put their homes up for rent.
Dominic Agace, chief executive at Winkworth, said: “The rise in interest rates, which began after the mini budget in Q4 2022 and was sustained through 2023 by the fight against inflation, took its toll on the UK property market.”
Winkworth said it expects sales to increase this year as buyer sentiment has shown signs of improvement.
The estate agent said its pre-tax profits were on track to be £2.1m for 2023, down from £2.5m a year earlier. Despite the dip, the company said it “feels more optimistic [about the market] than this time last year”.
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