With those pesky interest rates playing havoc with mortgages, rents are still climbing in most parts of the UK. The property website Home says that while London and the Midlands have seen slight dips, rents are still soaring in Scotland, Wales, Yorkshire, and the South West.

Average UK rents are now 2.5% higher than they were just a year ago!

Sales Market Slowing, But Not Stalling

Now, the news isn’t all rosy for the sales market. High mortgage costs and a glut of homes for sale have slowed things down, especially in the South. But don’t get too down in the dumps, because the North, Scotland, and Wales are still going strong!

Rentals Are Fueling the Property Market

Here’s the real kicker: the rental market is keeping the property market afloat. Rents have jumped a staggering 44.6% in the past five years, which is a huge boost for the sales market.

Why are rents so high?

The simple answer is supply and demand. There are fewer homes available to rent than ever before. In July 2019, there were 122,000 homes on the market, but today that number has dropped to a measly 66,000!

Time for a Rate Cut?

Home is calling on the Bank of England to cut interest rates, arguing that they’re holding back investment in new builds, which we desperately need to increase the number of rental properties.

So, what does it all mean for you?

• Landlords: The rental market is still your friend. Keep those properties in good condition and you’re likely to see continued strong returns.
• Investors: Don’t be scared off by the current economic climate. The rental market is strong, and investing in new builds could be a smart move.
• Everyone else: Brace yourself for more of the same. Rents are likely to stay high, and the cost of living is unlikely to ease up anytime soon.