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Young people are facing some of the highest rents of all time, according to the latest findings from the Office for National Statistics.
In fact, for those aged 22-29 and living in London, average monthly private rents have increased by over a third in only seven years. It means a 25 year old living in the City is probably paying around £1,500 per month in rent alone – over half of the average income of those in the same age category.
Not only could this cause a skill shortage, as young people may seek jobs that are within a proximity to less expensive places to live, it could also mean young people are remaining in rented properties for longer as opposed to getting their foot on the housing ladder.
As the election draws closer, a number of policies aimed at “rogue landlords” have hit the headlines. The Conservatives have pledged to scrap Section 21 notices, which adds more security and peace of mind to tenants facing the end of their tenancies. However, it seems capping rents is high on the agenda for the Labour party, which may introduce something called “rent controls”. This is already adopted in other countries around the world and involves capping rents at market rate. Any rises in rents must only be in line with inflation.
Whilst the UK average rent accounts for around 30% of income, London is the highest rate at 53%, with the rest of the south east corner coming in at just under 40%. For the cheapest rents, tenants will need to move up north to Yorkshire and the Humber or Scotland, but lower rents can also be found in Wales and the East Midlands, where rent accounts for just over 20% of income.
Whichever party ends up in Government, something needs to be done to target young renters, particularly as rents rise faster than wages. There’s also the ongoing debate around purchasing property and whether any Government will feel pressure to continue to build affordable homes remains to be seen.
We will be keeping a close eye on the election results, as well as what it might mean for businesses and individuals. In the meantime, if you have any questions relating to your property, whether you are a buy to let investor, first time buyer or tenant, contact the Property team at Downs Solicitors to see how we can help.