Landlords in Wales face ‘financial crunch’ as rents fall and mortgage prices surge
Landlords in Wales face a “financial crunch” as rents fall and mortgage prices surge, according to estate agents.
Hamptons said that average rents fell by 0.7pc in Wales year and year, as the average monthly rent dipped to £752.
Wales saw the biggest drop in rent growth across the nations of the UK, apart from the South East of England where rent growth dipped 1.2% in the year to September. It continued to surge by over 4.9% everywhere else, including 26.1% in Inner London.
Meanwhile, landlords are facing soaring mortgage costs as the Bank of England raises interest rates to tackle spiralling inflation.
The combination could tip many landlords into a situation where they are making a loss on their properties, Hamptons said.
“A landlord who bought an average home two years ago with a 25pc deposit would need to increase their equity from 25pc to 55pc if they remortgaged today in order to maintain the same monthly returns compared to when they first bought,” Aneisha Beveridge, of Hamptons, said.
Last week Conservative Shadow Housing Minister Janet Finch-Saunders warned that measures put in place by the Welsh Government to control the proliferation of second homes would cause “a tsunami driving landlords to sell up”.
The Welsh Conservative Senedd Member for Aberconwy also claims that efforts to reduce the number of holiday homes in communities as part of a cooperation deal with Plaid Cymru is exacerbating the shortage of private rental properties in Wales.
Figures compiled by the shadow minister with the National Residential Landlord Association reveal that 26.8 per cent of landlords in Wales have sold property in the last 12 months, with 49 per cent saying they plan to sell a property in the next 12 months.
It is only a few months since Wales was being advertised as one of the best place for landlords from London and Bristol to buy property.
In March, the Telegraph newspaper had said that “investment can be fruitful” as a shortage of properties available to rent had led to a “bidding war among tenants” in the Welsh valleys.
The Telegraph quoted Emma Liverick of Bidmead Cook Estate Agents who says that tenant demand in Merthyr Tydfil had reached “unprecedented” levels, with properties being snapped up within two days of listing.
In June it was also reported that over half of Wales’ landlords were hiking up their rates during the cost of living crisis.
62% of landlords in Wales had decided to put up their monthly rent payments, adding an extra burden on tenants amid rising food and fuel prices, according to Hamptons.
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