Editor's note: This brief was summarised by The Property AI Team from a report by Property Industry Eye. Read the original article for full details.
UK Rents Rise 3.8% as Landlords Warn Costs Are Squeezing Supply
UK private rents rose by 3.8% in the year to September, matching August's rate and marking the joint-highest annual growth since December, according to the Office for National Statistics (ONS). In England, rents increased by 4%, while annual UK house price growth slowed to just 0.9% in August, its weakest pace since March.
Industry commentators warn that limited supply, higher borrowing costs and regulation could keep rents rising. Tom Bill, head of UK residential research at Knight Frank, blamed tight supply and growing regulatory risks. He said landlords were increasing asking rents to offset potential costs linked to void periods and possession proceedings. Bill also warned that proposed Minimum Energy Efficiency Standards could force landlords to spend more on their properties.
Alex Upton, managing director at Hampshire Trust Bank, said strong tenant demand was no longer enough to encourage investment. He pointed to Rightmove figures suggesting rental supply remains constrained, particularly in London. Upton said higher borrowing and operating costs are forcing investors to reassess potential returns, with landlords increasingly considering long-term performance, refurbishment opportunities and alternative investment strategies. He also highlighted growing interest in houses in multiple occupation (HMOs), although these bring additional costs and management responsibilities.
Nathan Emerson, chief executive of Propertymark, said rising rents were adding to the financial pressures facing tenants. He said landlords were also struggling to balance higher costs with tenant affordability, and called for measures to encourage investment and increase the supply of rental homes.
Demand remains strong, but higher costs and uncertainty continue to constrain investment.
Source: Property Industry Eye