Young renters in Britain face a staggering £3.5bn increase in rent as landlords pass on mortgage costs, making housing even less affordable.
London: It’s been a tough year for younger renters in Britain. They’ve seen their rents jump by a whopping £3.5 billion, hitting record highs. This surge is mainly because landlords are passing on their rising mortgage costs.
According to Hamptons estate agents, folks under 45 are now responsible for 66% of all rent in the country. That’s about £56.2 billion in 2024 alone! It’s a staggering amount.
Why the hike? Well, the Bank of England raised interest rates to tackle inflation, which pushed mortgage costs up. This led to a peak in rent increases last December, with a 10.2% rise before it settled down to 2%.
With homeownership becoming a distant dream, more young people are renting. Last year, nearly 150,000 more under-45s joined the rental market, bringing the total to 3.4 million. That’s the fastest growth in a decade!
This trend coincided with the end of the Help to Buy scheme in March 2023, which had helped many first-time buyers. Now, many millennials are finding themselves stuck in the rental market longer.
Aneisha Beveridge from Hamptons pointed out that higher mortgage rates have really limited young people’s chances of buying homes. So, they’re renting for longer, which is a tough spot to be in.
Interestingly, older renters are feeling a bit of relief. Their rent burden dropped by £700 million last year, as fewer over-45s are renting now.
Despite all the challenges, house prices have still climbed. Halifax reported a 25% increase over the last five years, with the average price now around £300,000. Prices vary quite a bit across the UK, though.
In November, house prices were rising at an average rate of 3.3% annually, with Northern Ireland seeing the highest at 6.2%. Rightmove also noted a 1.7% rise in asking prices for new homes this January, the biggest jump since before the pandemic.
Over the past decade, rent in the UK has skyrocketed by 71%, surpassing £85 billion in 2024. Experts warn that rents will likely keep climbing as landlords adjust their prices in response to new legislation aimed at strengthening renters’ rights.
This upcoming bill, expected to pass later this year, will introduce several reforms, like ending no-fault evictions and limiting upfront rent demands. While many welcome these changes, landlords are bracing to adjust their rents accordingly.
