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UK Property Finance Discusses the Financial State of the UK’s Private Rental and Mortgage Markets

UK Property Finance
UK Property Finance

Independent Finance Broker Talks Economic Turbulence and the Living Cost Crisis Gripping UK Households

UK Property Finance

Independent Finance Broker Talks Economic Turbulence and the Living Cost Crisis Gripping UK Households
Independent Finance Broker Talks Economic Turbulence and the Living Cost Crisis Gripping UK Households

Leicester, May 09, 2022 (GLOBE NEWSWIRE) -- Monthly rents have been accelerating for some time in key regions across the country, driven by the growing disparity between available inventory and demand from tenants. As it stands, the UK’s private lettings market is more competitive (and potentially profitable for landlords) than at any time since records began.

UK Property Finance reports that the new monthly average rent of £1,088 outside London represents an annual Q1 increase of more than £100 from the previous £982. This equates to a 10.8% average increase in asking rents – the first time average annual rent growth has exceeded 10%.

Average asking prices in London increased by as much as 14.3% from the same period last year, when the average rent prices per calendar month stood at £1,919.

“Life in the UK is not getting any cheaper, as the cost of living increasingly puts the squeeze on household budgets across the country. But skyrocketing inflation and unprecedented energy bills are not the only financial headaches the British public is being forced to contend with. According to the latest figures from Rightmove, average monthly rents on the UK’s private lettings market have jumped to an all-time high of £1,088. For private tenants in London, it now costs an average of £2,193 per calendar month to rent a home.”UK Property Finance

Commenting on the figures, director of property data at Rightmove, Tim Bannister, said that at no point since records began has the market been so competitive.

"In the first three months of this year, we’ve seen tenant demand exceed the high levels set last year, which when coupled with the fewer available homes for rent, has resulted in the most competitive rental market we’ve ever recorded," - Tim Bannister, Rightmove.

Demand continues to Outpace Supply

Rightmove also revealed that the number of tenants enquiring about rental properties is currently 300% greater than the actual number of properties available. This is giving landlords the opportunity to choose between multiple prospective tenants for most of their properties, often signing contracts with the highest bidders.

The number of rental properties listed as available increased by 5% in March, but there are still 50% fewer available properties on the market today than there were at this time last year.

Following a temporary lull in popularity attributed to the coronavirus pandemic, demand for rental properties in London is up by more than 80% compared to 2019. In the capital, the number of available rental properties has fallen by around 47% within the same period.

Outside London, demand for quality rental properties is particularly high in Liverpool and Manchester, driving annual average monthly rent increases of 17.1% and 19.3% respectively.

Mortgage Providers Expect More Defaults as Living Costs Increase

“Those who already own their own homes in the UK could find themselves in an increasingly difficult position where their mortgage payments obligations are concerned. Anticipating a raft of defaults attributed to the cost-of-living increases, some of the UK’s biggest banks may have no choice but to cut interest rates for the benefit of their customers,”

“In addition, the latest quarterly credit conditions survey conducted by the Bank of England indicated that lenders in general intend to slow the supply of mortgages at a pace not seen since the outbreak of COVID-19. This will make it more difficult for new customers to qualify for products such as bridging loans or for mortgages while the crisis plays out; locking even more Brits into expensive long-term private lets.”UK Property Finance

The Bank of England’s survey referenced by UK Property Finance did not reveal any specific information as to the extent to which lenders will restrict access to their mortgage products but did confirm that more defaults were expected over the coming months.

“The net percentage balance for changes in default rates on secured loans to households was expected to increase in the second quarter," reported the BoE.

Unprecedented Cost-of-Living Hikes

UK Property Finance highlighted how households across the UK are already being forced to contend with the kinds of living cost increases not seen in recent history, with inflation having hit a 30-year high of 7% in March. Fuel and energy prices have hit record highs, mortgage costs have increased significantly for many, and the economic impact of the pandemic is still being felt by millions of UK households.

“Should lenders take steps to reduce the availability of mortgage products, it will buck the trend of an 18-month period during which the housing sector has demonstrated nothing but stellar performance. Average property prices continue to hover at all-time highs, while the reintroduction of 95% LTV mortgages by many lenders helped encourage more first-time buyers to make their moves.” UK Property Finance

Speaking on behalf of Hargreaves Lansdown, senior personal finance analyst, Sarah Coles also warned that the UK’s growing cost of living crisis could see many plunged into a dangerous debt spiral.

"With inflation gathering momentum, and eye-watering price rises for many of the essentials, it has forced more of us to borrow to make ends meet,” she said.

"Credit card borrowing grew faster than any other month on record in February – the most recent month we have data for,”

"But while this feels like a solution in the short term, you’re building up problems for the future, because you’re adding interest and repayments to the ever-growing mountain of monthly costs, which makes it harder and harder to stay on top of our finances each month."

Electricity and gas bills alone for a typical UK household went up £693 a year in April, while around 4.5 million prepayment customers can expect to pay an additional £708 in energy costs this year - an increase from £1,309 to £2,017.

This PR was created by UK Property Finance - a fully independent, FCA-regulated organisation specialising in bespoke financial products and advice for property buyers, investors, and developers. The company also operates, Britain’s leading name in the arrangement and brokerage of intelligent short-term financial solutions.

Media Contact –

Name: UK Property Finance
City: Leicester
Country: United Kingdom
Telephone: 0116 464 5544

There is no offer to sell, no solicitation of an offer to buy, and no recommendation of any security or any other product or service in this article. Moreover, nothing contained in this PR should be construed as a recommendation to buy, sell, or hold any investment or security, or to engage in any investment strategy or transaction. It is your responsibility to determine whether any investment, investment strategy, security, or related transaction is appropriate for you based on your investment objectives, financial circumstances, and risk tolerance. Consult your business advisor, attorney, or tax advisor regarding your specific business, legal, or tax situation. Newsroom: