20
May
Rental prices increase as property prices drop
Many tenants in the UK are facing big rental increases despite the
fact that house prices are falling, according to the BBC.
It cites a prediction from Capital Economics that rents will rise
by between ten and 11 per cent over the next two years, while at
the same time house prices will drop by 20 per cent over the same
period.
Speaking to the news provider, EuGin Song, a London-based landlord,
admitted that he had raised his rental prices as a result of
increased demand - with people reluctant to buy property in the
current turbulent housing market, many are choosing to rent
instead.
In addition, supply is dwindling as the buy-to-let market cools,
which also pushes rents up.
"Historically, rents and prices are inversely cyclical … when
property prices go up, rents come down. When prices go down, rents
go up," Mr Song told the BBC.
Despite rising prices, residential property agents Ludlow Thompson
suggested earlier this month that renting a buy-to-let property
could be a cost-effective option for those looking for somewhere to
live in London.
