Tenants 'expecting further rent increases'

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The Independent Online

Four out of 10 tenants expect the cost of renting a home to keep rising in the coming year as property supply fails to keep up with demand, a survey showed.

Around 42% of people living in let accommodation are bracing themselves for further rent hikes, with 11% expecting increases of 10% or more, according to property website Rightmove.co.uk.

People's expectations of further rises come despite the fact that recent research by LSL Property Services showed that the cost of renting a home has already hit a record high, while Rightmove said some agents had reported hikes of 10% during the past year.

Anecdotal evidence suggests there have also been cases of rent gazumping in some areas, as would-be tenants battle against each other to secure a place to live.

Demand for rental accommodation has increased in recent months as potential buyers have put plans to move on hold due to the problems in the mortgage market, or until the outlook for house prices becomes clearer.

But landlords have been unable to respond to the rise in demand because they are also struggling to raise the finance they need to buy more properties.

Overall, the group said the number of properties available to rent which were advertised on its website had fallen by 23% during the past year.

Miles Shipside, director of Rightmove, said: "For the second consecutive quarter more than 40% of renters are revealing their fears of another upwards movement in rents.

"They are at the sharp end of competitive demand from other renters, experiencing a struggle to find suitable rental accommodation and losing out on properties to higher bidders.

"Rental agents are reporting turning many prospective tenants away, with only those with the best references passing the beauty parade to get to view the limited new stock on offer."

Rising rents are bad news for the 55% of people who said they were trapped in rental accommodation because they could not afford to buy their own home.

But the figure is down from 61% at the beginning of the year, suggesting recent house price falls may be enabling more people to get on to the property ladder.

Nearly a third of renters also said they were likely to stay in rented accommodation for at least the next three years.

However, 13% of people said they were happy renting their home and had no interest in buying a property.

:: Rightmove questioned 2,636 people during October.

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