The real estate sector in Great Britain is heading towards a new crisis, the characteristics of which will appear in the coming months, since more than half of the tenants will not in able to pay rent and financial obligations to landlords.
This means that the country will experience a wave of tenant defaults, which could consequently affect the ability of these homeowners to meet their bank mortgages if they depend on rent to pay them.
A report published by the British newspaper ‘Daily Mail’ says that more than half of tenants are worried that they will not be able to pay their rent next year, as 58% of property rents have seen quest’year a rise among the cost of living crisis that exhausted the British.
One studio conducted by researchers at Market Financial Solutions found that 49% of renters are concerned about not being able to pay their rent in 2023.
At the same time, 48% of landlords said they have increased rents on their properties, due to rising interest rates and rate of the mortgage.
However, more than half of landlords (56%) said it would allow tenants some degree of flexibility when it comes to making payments.
The average rent in Britain recently rose to more than £1,200 a month for the first time in absolute, according to data from Hamptons estate agents for October, which is £80 a month or 7.1% in more than a year ago.
This rapid growth in costs means that the typical household in rent now spends 44% of its after-tax income in rent, the highest share since the beginning of record of the Hamptons in 2010.
According to a survey conducted by Market Financial Solutions, three quarters (77%) of renters say more needs to be done to control rental prices in the UK.
And last month, the Scottish Government introduced emergency rent freeze legislation in the country, meaning that for most tenants, rents cannot be raised until at least 31 March 2023.
And while there have been calls from the Mayor of London, Sadiq Khan, for similar rent controls to be introduced in the British capital, they seem unlikely to be heeded by the government.
Paresh Raja, CEO of MFS, who conducted the survey, said: “It has been a busy and busy year, with the base rate in increase of 2.9% and inflation at 11.1%.
New research shows that this economic turbulence has forced landlords to raise rents, while millions of people worry about their ability to afford rent next year.
“Our research also shows that the majority of landlords are supportive of the cost-of-living crisis; many have chosen to freeze rents, while most are willing to be flexible when it comes to payments,” Raja added.
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