Rents rise at fastest pace on record as Gove’s crackdown on landlords backfires

Record number of landlords selling up as Michael Gove ploughs on with rent reforms

Source Daily Telegraph 20/03/24

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Rents rose at a record pace in the year to February as Michael Gove’s crackdown on landlords backfired on the market.

The average private rent in Britain stood at £1,238 last month – £102 higher than a year earlier, according to the Office for National Statistics (ONS).

The ONS said the 9pc increase marked the highest rise since UK records started in 2015.

The highest increases were seen in Kensington and Chelsea, at £3,248.

Excluding London, the local area with the highest average private rent in February was the city of Bristol, at £1,734.

One in ten landlords are expected to sell up as a result of Levelling Up Secretary Michael Gove’s end to so-called no-fault evictions, a survey by the National Residential Landlords Association (NRLA) trade body found.

The Renters Reform Bill could also see all assured fixed tenancies replaced with rolling contracts, and landlords unable to prohibit reasonable pet ownership.

A record high of 21pc of landlords sold a property in the last year, whereas just 8pc bought, according to the NRLA.

A 10pc exodus of small and medium-size landlords would wipe out £4.5bn and nearly 40,000 jobs, research by consultancy PwC has found.

It comes as the average house price in the UK decreased by 0.6pc to £282,000 in the year to January.

Average house prices fell to £299,000 in England and £213,000 in Wales but rose 4.8pc in Scotland and 1.4pc in Northern Ireland.

Tomer Aboody, of property lender MT Finance, said the housing market was likely to pick up in the coming months as a result of stabilising prices.

He said: “As property prices are stabilising and slowly creeping back up again, increased activity in the market is likely in coming months with inflation once again falling and a reduction in interest rates potentially on the way.”

It comes ahead of tomorrow’s Bank Rate decision from the Bank of England’s Monetary Policy Committee.

The Bank Rate has been held at 5.25pc since August following 14 consecutive rises from December 2021, but following the announcement that the economy is on track to hit the 2pc inflation target in April.

Verona Frankish, chief executive of Yopa, said: “With this morning’s inflation numbers coming in slightly better than expected, all eyes will be fixed on the Bank of England this week in anticipation of a base rate reduction.”

A Department for Levelling Up, Housing and Communities spokesman said: “We recognise the cost-of-living pressures tenants are facing, and our landmark Renters Reform Bill offers a new, fairer deal for tenants and landlords. The most recent data shows the size of the private rented sector has doubled since 2004, peaking in 2016 and has remained roughly stable since.”