20 May

Rental prices increase as property prices drop

Rental prices increase as property prices drop

Many tenants in the UK are facing big rental increases despite the fact that house prices are falling, according to the BBC.

It cites a prediction from Capital Economics that rents will rise by between ten and 11 per cent over the next two years, while at the same time house prices will drop by 20 per cent over the same period.

Speaking to the news provider, EuGin Song, a London-based landlord, admitted that he had raised his rental prices as a result of increased demand - with people reluctant to buy property in the current turbulent housing market, many are choosing to rent instead.

In addition, supply is dwindling as the buy-to-let market cools, which also pushes rents up.

"Historically, rents and prices are inversely cyclical … when property prices go up, rents come down. When prices go down, rents go up," Mr Song told the BBC.

Despite rising prices, residential property agents Ludlow Thompson suggested earlier this month that renting a buy-to-let property could be a cost-effective option for those looking for somewhere to live in London.

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