In a concerning development for tenants across the country, the National Association of Property Buyers has issued a stark warning that rent prices will continue their upward trajectory. The association, one of the foremost authorities in the field, claims that landlords are abandoning the property market in unprecedented numbers, contributing to the surge in rental costs.
According to Jonathan Rolande, a spokesperson for the National Association of Property Buyers, the current market conditions have rendered property investment “deeply unattractive” for landlords, prompting many existing ones to sell their properties and exit the market. Rolande highlighted the lack of capital growth as a major deterrent for potential landlords, stating, “At the moment, with such a lack of capital growth, you have to ask who would choose to be a landlord? Higher rents have gone some way to balance the books, but many with a mortgage do little more than cover the interest each month. More landlords will try to quit this year as capital values and saleability fall.”
Looking ahead, Rolande expressed his expectation of a rapid decline in overall housing market activity within the next six months. He emphasized that the approaching holiday season traditionally brings about a dip in sales, a trend likely to be exacerbated by falling sales volumes over the next six weeks. This downward pressure on prices, combined with the burden of increased interest rates, is expected to result in a subdued bounce in September. Furthermore, landlords with existing mortgages are unlikely to move upmarket, while those relying on mortgages are not anticipated to significantly expand their property portfolios. Consequently, many landlords are projected to exit the market altogether, further contributing to the autumn market’s property supply.
While a price freefall is deemed unlikely given the current circumstances, a surplus of available properties and dwindling buyer numbers will inevitably force anxious sellers to slash prices in an attempt to attract the diminishing pool of prospective purchasers. The future of the property market appears increasingly grim as the association predicts a challenging winter ahead.
A report released last week supports these concerns, revealing a decline in buyer interest, sales, and property prices during June, primarily driven by soaring mortgage rates. According to the Royal Institution of Chartered Surveyors (Rics), new buyer enquiries plummeted to an eight-month low due to a “renewed deterioration” in the UK sales market. The report further indicated that many estate agents surveyed by Rics believe this downward trend will persist in the coming months.
As the rental market continues to tighten its grip on tenants, prospects for affordable housing appear bleaker than ever. The exodus of landlords and the associated rise in rent prices have created a perfect storm, leaving many individuals and families grappling with the financial burden of finding a place to call home.