The BBC is quoting a report that predicts a 10% rise in rents over the next two years as house prices fall by 20% in that period.
Whilst that seems to be great news for landlords, and bad news for home owners, I really wonder if that prediction is accurate. Or at least is accurate for any region other than London.
In my region, Essex around 20 miles North of London, there seems to be a glut of houses available for rent as home owners are unable to sell and are therefore resorting to the lettings market to facilitate the move from their property.
With more house available to rent, it is inevitable that the increased competition will drive down rents, and that is exactly what is happening in my area. One local house owner has dropped their rent by £400 per month in an attempt to find a tenant. Another nearby house is now available with a rent reduced by £350 per month.
It is not just that there seems to be a glut of houses on the rental market. People cannot sell their properties and therefore cannot rent their next house as they are trapped in their current home. So even if people want to rent their next home, they seem unable to do so.
The stagnation of the house sales market seems to be feeding through to a stagnation of the rental market. In my part of the UK, at least.