Totally shocked at the cost of rental properties

[Bumfluff29]

I had no idea the cost of rentals now are so high. We’ve been thinking of selling our house and moving into rented accommodation to break any chain if needed. I’ve looked at the cost of rents and can’t believe how much they are: much more than our mortgage payment. What’s shocked me most is the condition of some of these properties- they look like they haven’t been updated since the 70s in some cases. Has the rental market been like this for a while or is this a recent thing? Maybe I’m totally naive but before we (luckily) managed to get our mortgage we rented an enormous 3 bed house for 550 a month (2016) with all new appliances etc. A lot of the properties I’ve seen look like they desperately need new kitchens and bathrooms at the least, yet the rent is at least 900 a month.

Where I live the average price for three bed rental is £1200 it’s utter madness . Some are ok decorated others not so grate . It’s such a high amount of money to pay for nothing

I agree. We initially thought we would sell, clear our mortgage and debts and bank a healthy deposit and wait for some local new builds to complete but rent in the meantime. There was a serious lack of decent properties, the “cheaper” ones were very dated and the ones I liked way too expensive!
I guess many LL have increased rents to cover mortgage increases and many are selling due to interest rate rises so less properties available

Fortunately we found a house we loved so not having to go down the route of renting

It’s ridiculous isn’t it. I know I’m lucky that I’m in a position to buy again but I feel for people who can’t get on the ladder for whatever reason and end up having to pay for these properties in such a poor state with no certainty they won’t be forced to move out. I assumed rental properties would be in a much better state that most houses that were for sale

In this area prices were creeping up but have really gone up in the past 6 months or so. I've been keeping an eye on prices as am getting divorced and although hoping to stay in the house its not at all guaranteed. I have 2 dc. I've seen several tiny 2 beds up for £825. I'd be happy with a 2 bed but would genuinely struggle to live in one of these with 2 dc. I'd have to have a single bed in the Bix room and them bunkbeds in the small "double" room.

My experience is of my student children renting in Edinburgh....OMG - squalor for £550 per month each(£3300 per month).
Six of them in a flat with a tiny kitchen containing one two seater sofa and one chair - no other living space as those rooms had been made into bedrooms.

Airbnb in a tourist area and captive student market, to blame for that though! Ridiculous.

A small 3 bed is around £2k pcm here

Omg 😳

Try Surrey - starting price for a 2 bed rental is £1500 pcm. It’s outrageous.

Absolutely terrible that rents are so high.
When my dcs finish uni they will probably end up living at home

I live abroad and my parents are always trying to get me to move home. Last time I visited in 2018 my Mum made me look at the property listings in the newspaper and a small 3 bed terrace near them was 3k!!! It's truly nuts.

Welcome to the real world.

For context, this is a rural but not sought after rural area. A couple of years ago these cottages were being let for £400/450pcm

I pay £1900 for a 2 bed flat in south London

Now interest rates have gone up s24 has kicked in. This is contributing massively to rent rises.

Landlords are now having to pay tax on the whole income and not get the part that was interest tax free. It was to force buy to let landlords to sell up and mean more houses on the market.
We are accidental landlords and we haven't put up the rent to our tenants as they are great and we don't want them to have to find a new place. But it is costing us in tax and we are actually out of pocket each month. Most landlords have increased rents to cover the additional tax they have to pay. The horrid thing is that we will now have to sell up and our tenants who have a pet will have to find somewhere new to rent and will have to pay the new higher prices

It's been like this for ages. In 1995 we bought a 2 bed terrace with a 95% mortgage that cost us £180 pm (and interest rates were a lot more than they are now, about 7% I think).

There were similar properties on the same street available to rent at £350 pm, which we couldn't afford.

Rents have always been going up. More steeply since covid though. The mortgage interest rate raises are only now starting to trickle through and further effect rents. Several things the government have done have increased rents more than they would have gone up. As a pp said, the law change on taxable income from rentals changed from profit to all revenues which sent rents up. The law change banning tenants fees (used to pay application fees, credit check fees, move in and move out fees, etc) also caused rents to rise because estate agents then increased their % cut to replace that fee income as that’s how they pay their salaries, so landlords raised rents to compensate. So rent went up more than what tenants paid in fees anyway. Then there was the addition of the electrical inspection and safety, meaning landlords had more expenses and so rents go up a bit more. Then the deposit maximum was reduced from 6wks rent to 5wks rent and so rents went up a bit more so landlords could have a bit set aside against a bad tenant who trashed the place and fails to pay rent. The hostile environment laws where landlords have to check right to rent or face a £10k again meant higher rents.

The new law to “protect tenants” by banning section 21 no fault evictions (without actually banning evictions) will increase rents as many landlords depended on section 21 to get rid of bad tenants without the expense of court costs. That will increase rents. The banning of fixed term tenancies and forcing everyone onto a rolling tenancy will increase rents…you’ll see more of the thread of the poor single mum who just moved into a new rental two months ago and is being hit with a rent increase, when previously landlords had to wait for the 12mos of the most common fixed tenancy to come to an end.

Finally supply and demand are pushing rents up. Landlords are selling up due to it becoming more of a money sink than a nice passive income for retirement (per good old days). Homeowners are going to be losing homes and falling off the property ladder in greater numbers due to the interest rate rises. Government is cutting spending, so goodbye to any hope of more social housing.

It’s bad and is going to get worse before there is any chance it gets better.

Yep, rents have increased hugely in recent years. In my area I'd say rents have increased by at least £100 a month each year since 2020 but more for larger properties, which I think matches up with what you are describing. £600 a month would get you a one bed flat here now.

It is insane and probably only going to get worse as people's mortgages go up.

I paid £650 for a room in 2008. House complete with serving hatch, orange carpet and electrics that sparked if you weren't careful. Not much has changed.

That’s if you can get a rental property, they have 8/10 couples lining up and it’s not always easy getting picked.

you need to go through affordability checks, etc

Hey, don't knock a serving hatch. Our first flat had one, it was very useful.

Our current house also had one but it's been blocked up, which is a shame, because it really worked with the layout of the of the kitchen and living/dining area.

Given the increases in utility bills, many people would probably now prefer smaller rooms rather than a massive open plan downstairs living space.

Rules on insulation and energy efficient are about to push them up even higher…

Yes they are. No landlord is going to install a heat source pump, EV charger and insulate to EPC and be out of pocket, so those costs will be recouped by even higher rents. The government really screwed things by changing how they tax landlords.

A 3bed house round here is going to be £2000 pcm.

I just looked on right move for rentals in my area (Surrey) 3 bed flat for £2200 a month, it's absolute madness!