Rent prices rising at record levels
In the biggest annual increase since records began, rent prices shot up a staggering 2.6% in Scotland last year according to recent figures from the Office of National Statistics (ONS).
This has forced the country’s lowest earners to spend more than 50% of their salary on rent every month and a third of private tenants. That’s around 250,000 people living in poverty with even the cheapest rental properties in some areas commanding a significant chunk of their salaries.
The price hike will put further pressure on families that are already struggling as the cost of living continues to soar with skyrocketing household bills and rising inflation rates up and down the country.
What has caused rent prices to rise?
The rise in rent prices has been triggered by several factors but mainly by a lack of rental stock and rising competition as landlords scramble to sell their properties whilst house prices are still experiencing a record high.
This has resulted in significant profits for landlords, real estate agents and housing developers but increased hardship for both existing and brand-new renters. What’s more, a growing number of tenants also now being asked to bid against fellow tenants in a last-ditch attempt to secure a property.
As a result of ongoing rent hikes, Living Rent has reportedly urged the government to introduce rent controls sooner rather than later to prevent the current situation from worsening and inevitably spiralling out of control.
If successful, this would impose a limit on the amount landlords can charge their tenants and, in doing so, ensure that monthly rent payments remain affordable and manageable with no sudden or unexpected price hikes leaving anyone out of pocket or with nowhere to live.
House prices are also on the rise
It isn’t just the rental market that is experiencing unprecedented price escalations.
Industry statistics show that three in five homes listed for sale are snapped up within 30 days or less, highlighting the current imbalance between supply and demand within the wider real estate market.
In Scotland, for example, house prices increased by 8.9% from January 2021 to January 2022 and asking prices surged by 7.5% between January and February of this year alone with a growing number of homeowners looking to relocate as lockdown restrictions gradually ease and hybrid working slowly but surely becomes the norm.
Halifax has also reported that in 2021, house prices in the UK rose at the fastest rate that they have since 2004 with homeowners seeking more space taking advantage of stamp duty holidays and low-cost borrowing. Because of this, the average UK property price rose to £276,091 in December 2021 in what was a £24,000 rise from the cost of a typical home over the course of the year.
This comes as the average house price in the UK reached a record high on eight separate occasions in 2021 despite residents being subjected to strict lockdown measures for the first half of the year due to the ongoing COVID-19 pandemic.
What help is available?
It can be difficult to know where to turn when it comes to rising rent prices with little to no control over how much rent your landlord can charge you, but help is available.
If you have become unable to afford your rent payments for whatever reason or are worried that you may not be able to keep up with your rent payments if they were to increase any further, you must seek help as soon as possible.
It can provide you with some much-needed peace of mind and prevent you from falling behind on your rent payments and, as a result, potentially losing your home with time of the essence when it comes to seeking expert financial advice and guidance with any monthly payment.
Carrington Dean has helped thousands of customers worried at the prospect of mounting debt or are just curious as to what their options are over the years and can help you too.
To find a debt solution that is expertly tailored to your financial situation, our experienced advisors are on hand to answer any question or query you may have. We can guide you through the process from start to finish whether you are in rent arrears or are just looking for further information.
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