Foxtons has declared an increase in income from lettings in response to a massive increase in demand for rental houses across the United Kingdom.
The London-based company’s revenue from lettings transactions increased by 18% to £29,2 million in the quarter ending September 30.
The average monthly rent in the United Kingdom is now £1,162, an increase of 11% compared to the previous year, as a result of increased demand from tenants.
During the Covid outbreak, many people preferred to relocate to coastal and rural areas, but analysts are now observing a reversal of this tendency.
Manchester, Cardiff, and Edinburgh are among the cities where rental costs have increased the most during the past few months.
Experts opined that young professionals desiring to be in the heart of cities, enjoying the pubs, restaurants, and activities on offer, was a common occurrence, especially if lockdown limitations were lifted.
In an effort to minimize family expenses, however, there has been an increase in the number of elderly individuals downsizing from vast country estates to smaller apartments in the city center.
This week, university students in Durham were forced to wait overnight in line and sleep on the streets in order to be the first to inspect newly available rental flats.
It appears that rising mortgage rates and a worsening cost-of-living issue – exacerbated by Kwasi Kwarteng’s disastrous’mini-budget’ last month – are pushing more individuals into the rental market.
This appears to be the opinion of Foxtons, which today signaled a “less certain” sales market while recording overall revenues of £43,8 million for the previous quarter, a 25 percent increase.
This was partly due to the success of its lettings sector, which generated £29.2 million during the same time period.
Its price increased by 14% to £32.29 this morning as a result of the company’s impressive financial results.
Foxtons CEO Guy Gittins stated, “We begin the fourth quarter with a less clear sales market background, but cost action taken in the first half of the year and our strong lettings and financial services businesses equip us to withstand more macroeconomic and political problems.”
According to the most recent ONS data, the rental price increase experienced by tenants between this year and last year represents the highest yearly growth rate since comparisons began in January 2016.
Sam Cullen, an analyst at Peel Hunt, told the Financial Times that the company’s figures “support everything you’ve heard anecdotally about rents: rental growth is through the roof.”
He predicted that the trend will continue in the near future, but cautioned that renters have limited disposable income.
“If it’s £2,500 per month and increasing to £3,000 per month, you can either afford it or you can’t,” he added.
In fact, a tiny studio apartment with a bed facing an oven was discovered on the market for a whopping £3,000 per month, which is an indication of the escalating pricing.
The outrageous price was so shocking to prospective tenants that they questioned whether it was an error.
The apartment in fashionable Hackney, east London, consists of a double bed facing an oven, sink, under-counter refrigerator, and microwave, together with a closet and a tiny table to the side.
On the wall is a single dismal photograph of a solitary tree silhouetted against a sunset. The open cabinet contains a meager variety of pans.
It appears that soiled brown bedding and a matching towel are provided.
In addition, there is a bathroom that is not depicted in the listing.
The bedsit is described as “a charming one-bedroom, one-bathroom studio apartment in a fantastic location.”
There is also a parking spot, but no garden, and all utilities are included in the rental.
Unbelievably, a two-bedroom apartment with a balcony and separate kitchen is advertised for only £315 extra per month just one kilometre away.
It comes after this week’s horrific images of desperate undergraduates waiting in lengthy lines outside estate brokers on the streets of Durham.
The lines are caused by letting agents release all of their homes onto the market at once, sometimes called as a “drop.”
As properties in the city are scarce and many are pricey, students report feeling compelled to join the lines.
A second-year student stated, “Demand far exceeds supply, and in a historic city like Durham, there is no expansion capacity, therefore the issue cannot improve unless the institution stops accepting so many students.”
The 93% Club, a student-run organization dedicated to enhancing the educational experience of Durham public school students, has launched a campaign to lobby the university and local government to fix the “broken” housing system.
The society described its purpose in a social media post: ‘The housing system here is not designed with the best interests of students in mind, but those of landlords. This chaos must end immediately.
Our effort is not just for students, but for the entire region of Durham. As a pillar of the community, the institution is obligated to assist those in need.
With the support of Mary Foy MP and Durham’s student union, they have demanded a face-to-face meeting between university administrators and students to discuss housing difficulties.
The Educational Outreach Officer, Dan Lonsdale, stated, “The University’s response has been inadequate.” Our most recent communication with them revealed that the university denied any influence on the private rental market; this is simply unacceptable.
“There is significant discontent, but [the 93% Club] wants to prevent it from boiling over, so we have called a public meeting.”
The issue has not only affected students, but the entire Durham community.
One local resident remarked, “This is absurd.” I have argued for years that the University must cease its expansion. It is not the fault of the students, but they are ruining the city and we are being overrun.’
A spokesperson for Durham University stated, “We work diligently to support our students in both academic and non-academic matters, including collaborating with Durham Students’ Union and student leaders as needed.”
‘Renters are currently facing a significant difficulty, since there are simply not enough rental homes available to fulfill the demand,’ he said.
‘Finally, the disparity between supply and demand is widening across the board. To even begin to balance the scales, we’ll need a substantial influx of new housing inventory.
John O’Malley, CEO of Pacitti Jones in Glasgow, stated, “Younger professionals want the same things they’ve always wanted: to go out and have fun. This means being back in the heart of our cities and enjoying the available social facilities.”
“As a result of the substantial increase in the cost of living, we are already beginning to see elderly individuals downsizing to apartments in order to lower their household expenditures. This is something we anticipate seeing more of.’
Foxtons’ Managing Director of Lettings, Gareth Atkins, stated, ‘The Lettings market continued to rise in September as the average rental price reached a new record high.
Students physically returned to London after Covid, corporate relocations started in full force, and rising interest rates persuaded some buyers to stay renting for the foreseeable future, all of which contributed to this demand.