A recent study has been conducted by Rightmove which has shown that 60 percent of tenants in the south-east, and London, are expecting to have to pay higher rents next year. In fact, the figures for London are actually slightly worse than this, with 66 percent of tenants saying that they are expecting to pay more. This is a significant increase on the number of tenants who were expecting to see an increase in their rate compared to last year.
The director of housing for Rightmove is Miles Shipside and he is commented, “It seems that tenants in this part of the country really believe that the housing market is only heading in one direction, and that is up.” This is particularly bad news for people in these two parts of the country, as they are already paying a large amount of money towards their rent, when you compare it as a percentage of their income. In London it is estimated that people are spending half of their take-home pay on making rent payments.”
Mr Shipside continued, “This survey showed that people in these two parts of the country are expecting the greatest increase in rent, but it also showed that most respondents are expecting this increase to occur within the next year. This indicates that these two markets are most at risk of overheating, and investor landlords need to seriously consider whether the area needs further investment.”
Research that has been conducted by Rightmove has actually shown that for investors, it can actually be worthwhile in investing in property elsewhere, as although the rents are lower, the return does tend to be better.