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Landlords in Wales face ‘financial crunch’ as rents fall and mortgage prices surge

24 Oct 2022 3 minute read
The keys to a property

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.

‘Unprecedented’

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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Y Tywysog Lloegr a Moscow
Y Tywysog Lloegr a Moscow
1 month ago

I saw the headline and thought “Oh here we go, what is Janet French and Saunders moaning about now?” Wasn’t wrong eh? But here’s the thing. Rents have dropped, because people have less money now AND because rents were ridiculously high in the first place, as landlords sought to profiteer from the demand in the market. House PRICES surged beyond the reach of many first time buyers because wealthy landlords were buying up all the spare houses in order to profit from them. Excuse me if I can’t manage to squint out any tears for them now that the gravy… Read more »

Last edited 1 month ago by Y Tywysog Lloegr a Moscow
The original mark
The original mark
1 month ago

Why don’t they introduce a rent cap, private landlords have proven over a number of years that they can’t be trusted to regulate themselves in a responsible way, so regulate them, and rent smart Wales needs a stick of dynamite put some where, they are useless for all involved.

Cathy Jones
Cathy Jones
1 month ago

You can’t see it because it is so teeny tiny, but somewhere, in one of the darker corners of Actual Hell, a very small violin is playing for all of the landlords….and just tucked behind that, stuffed right up the tiny fiddlers’ hole is all the fs I give for any landlords. landlords are trash. …Yes, ESPECIALLY the one you know/are related to, the one who “is only trying to make a nest egg for themselves, you shouldn’t begrudge working-class people trying to better themselves through property”, especially them, I hope they catch scabies and crabs and mange and thrush… Read more »

The original mark
The original mark
1 month ago
Reply to  Cathy Jones

Is John Cooper Clarke still about?

NOT Grayham Jones
NOT Grayham Jones
1 month ago
Reply to  Cathy Jones

i take it you dont like Landlords then LOL

Y Tywysog Lloegr a Moscow
Y Tywysog Lloegr a Moscow
1 month ago

Does anyone “LOL”?

Glen
Glen
1 month ago
Reply to  Cathy Jones
Kerry Davies
Kerry Davies
1 month ago

What is it written on stocks and shares?
All investments involve some degree of risk. In finance, risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision.


Peter Cuthbert
Peter Cuthbert
1 month ago
Reply to  Kerry Davies

Whilst I can sympathise with Cathy, especially if she is forced to live in poor standard rented accommodation, I would argue that not all landlords are that bad. After all the article reports that 38% of them have not put up the rent and I suspect that a number of them have, like me, reduced the rent to help the tenants get through this bad period. We do need a rental sector in the housing market as there will always be people who for various reasons wish to rent rather than buy. Whether that service is provided mainly by local… Read more »

The original mark
The original mark
1 month ago
Reply to  Peter Cuthbert

The issue is the housing market is virtually controlled by the PRS, basically housing has been privatised, if councils followed through on the right to buy deal where Thatcher said for every council house sold, they would build 2 to replace it, we wouldn’t be in the position we are,

SundanceKid
SundanceKid
1 month ago

She is basically complaining because the Welsh Government is making it more difficult for investors and property developers to make money off the back of the housing crisis in Wales.

The arrogance and immorality of this woman is simply breathtaking.

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