The cost of renting a private home went up very quickly last month, even faster than it has ever gone up since they started keeping track in January 2016.Rents in the UK increased by 5.1%, with even higher increases in Wales and Scotland, according to the Office for National Statistics (ONS).
Housing expenses are typically the biggest amount of money people spend each month. When housing costs go up a lot, it can have a significant effect on how much money they have in their budget. But, the prices of properties are going up at a slower rate because the increased mortgage rates make it harder for buyers to afford homes.
The prices of houses in the UK increased by 1. 9% from May of last year to May of this year. This is lower than the previous growth rate of 3. 2% from April of last year to April of this year.
UK house prices increased at a slower rate in May compared to the previous month, according to Aimee North from the ONS.
The average price of houses in the UK is still higher than it was 12 months ago. However, prices have decreased by £7,000 from the highest point they reached in September 2022.
“According North, rental prices in the UK increased once again, reaching the highest annual inflation rate since the start of record-keeping in 2016. ”
According to the ONS data, the price of renting increased by 5. 8% in Wales, 5. 5% in Scotland, and 5. 1% in England over the past year until June.
The West Midlands had the largest increase in England, with prices rising by 5. 4% In the North East, they only increased by 4. 4% In London, the cost of renting increased by 5. 3%
The most recent data about housing is released while inflation is decreasing.
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On Wednesday, the ONS announced that the prices of goods and services increased by 7. 9% from June last year. This was a decrease from the 8. 7% increase recorded in May.
However, mortgage rates for both homeowners and landlords have increased due to a number of interest rate rises in the past year and a half.
Michelle Lawson, who is in charge of Lawson Financial, a broker company in Fareham, mentioned that it is not surprising that rents are going up due to increasing mortgage rates and changes in regulations.”She said that landlords cannot handle these increases anymore, so they have to pass them on to others. ”
Other real estate agents said that there are not enough properties for rent, so there are more people looking for them than there are properties available.
Rhys Schofield, who manages a company called Peak Mortgages and Protection in Derbyshire, said that there was a 48% increase in people wanting mortgages compared to before Covid-19. He also mentioned that finding properties to rent was very difficult, similar to trying to find hen’s teeth. “He said that increasing rents are not beneficial for tenants. ”
The cost of properties
Property values only rose by 1. 9% in the last year until May, which is the most recent month for which data is available.
House prices were increasing much faster before, with the yearly rate of increase being 14% last year. They reached their highest point in September 2022.
House prices in different parts of the UK increased by different amounts.
In England, the average price of houses increased by 1. 7% to £304,000 in the year until May.
In Wales, the price increased by 1. 8% to reach £213,000.
In Scotland, the average price increased by 3. 2% to reach £193,000. And in Northern Ireland, the average price increased by 5% to £172,000.
In England, house prices increased the most in the North East, but they didn’t grow at all in the East.
Gabriella Dickens, who is a senior economist at Pantheon Macroeconomics in the UK, stated that they expect house prices to fall by approximately 10% overall.
Keep in mind, however, that even if prices decrease by that much, they will still be about 15% higher than before Covid.
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