Private rental growth set to increase in 2022

According to statistic by the Office of National Statistics, rental growth is set to increase again in 2022. Having grown substantially since 2017, with each year continuously growing higher. Excluding London, rental prices increased by 3% from 2021 to 2022 and is set to continue on this path throughout 2022.

In Wales Rental prices grew by 1.4% from 2021 to 2022. Scotland grew by an additional 2.6% being its highest annual growth rate since 2012. In Northern Ireland the rate was the highest it has ever been compared to any other country, a massive 5% higher, with a review set for 23 of March 2022 with updates on rental growth. 

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What Growing rental prices mean for landlords

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As rental growth continues to grow in each country, this means landlords rates can go higher, meaning an increase in profit/ return on investment for them. In places such as the North West and West Midlands of England which had the highest increase in rental growth over the last year and even going into 2022. As landlords can put their rates up, this does require the properties they own to be up to standard and comply with required laws.

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What Growing rental rates means for housing prices

Growing rental rates have a mixed response to housing prices. In some parts of the UK the rates have only touch a mere 0.4%, in price terms that is little to nothing. Whereas in some areas more specifically the South on England, house prices continue to grow. Due to the stamp duty changes during the lockdowns of 2021, allowing more people to get involved in the property market to even the financial issues of the COVID-19 pandemic, this allowed for housing to be slightly cheaper in majority of regions by 1-8% cheaper. Now that stamp duty fees are making a return, housing prices continue to grow, meaning it’s up to landlords how much the rent out their properties for.

 

What Growing rental rates mean for off plan property

Growing rental rates do not really affect off plan property. This is due to the nature of off plan property. Investors will buy part of a development and base the rental price of it based off of the value on current rates/ the value of the property after completion and decoration. The main focus for off plans for investors is capital growth, which is another factor for off plans not being affected much by rental rate increase.