The Telegraph is running an article stating that many ‘accidental landlords’ are selling and with estate agent Winkworth said it expected rent increases to slow this year as an increase in supply puts downward pressure on prices.

The article can be read here (subsection may be necessary) with the Key Points: Rental Market Forecast in 2024:

  1. Expectations for Rent Increases:
    • Winkworth, a UK estate agent, predicts a slowdown in rent increases in 2024.
    • The forecast attributes the easing of the rental crisis to an increase in housing supply, driven by a wave of “accidental landlords.”
  2. Accidental Landlords Impact:
    • A depressed housing market has led homeowners to become “accidental landlords” by renting out their properties instead of selling in a weak market.
    • The increase in accidental landlords is expected to provide more rental options, reducing the power of landlords to raise rents.
  3. Market Dynamics:
    • Homeowners, facing price uncertainty in a weak market, are opting to rent out their properties.
    • Winkworth anticipates slowing rent increases due to a combination of accidental landlords and tenants reaching affordability limits.
  4. Rent Increase Trends:
    • Private rents in the UK rose by 6.2% in the previous year, and in London, there was a 6.9% increase.
    • The rapid rise in borrowing costs, passed on to tenants by landlords, contributed to the surge in housing costs.
  5. Impact of Interest Rates on Property Market:
    • Rising interest rates, beginning in Q4 2022 and sustained through 2023 to combat inflation, have affected the UK property market.
    • Winkworth experienced a 19% decline in home sales in 2023.
  6. Sales Outlook for 2024:
    • Despite the challenges, Winkworth expects an improvement in buyer sentiment, leading to an increase in home sales in 2024.
    • The estate agent remains more optimistic about the market compared to the previous year.
  7. Financial Performance:
    • Winkworth anticipates pre-tax profits of £2.1 million for 2023, down from £2.5 million in the previous year.
    • Despite the dip in profits, the company expresses a more positive outlook for the market.

In summary, Winkworth’s forecast suggests a potential easing of the rental crisis in 2024, driven by increased housing supply from accidental landlords and a slowdown in rent increases as tenants face affordability limits. The impact of interest rate hikes and market dynamics will continue to shape the UK property landscape.