Britain’s property owners hold all the cards – so hard luck everyone else
As rising gas and electricity prices take centre stage after Ofgem set the October energy price cap at £3,549, it is interesting to see how little other parts of the economy have reacted.
A plentiful supply of cheap energy has underpinned every period of growth in national income over the past 70 years and the prospect of what was once ubiquitous and low cost becoming a major financial burden is one of the main reasons many economists predict that a recession will begin this autumn and run throughout next year.
At the moment these same forecasters don’t envisage the drop in GDP being very deep. And that’s because much else that underpins economic activity is expected to remain in rude health.
One of the pillars holding up growth is the property market. House price increases may have slowed in many areas, but they remain positive and continue to drive up values in coastal hotspots and desirable towns and suburbs to record highs.
Rents in the residential sector are also growing after a brief dip during the pandemic. Across the country, letting agents are so busy that their soaring commissions threaten to match the growth in mega-bonuses paid to investment bankers and private equity executives.
Despite talk of levelling up, London’s rental market has seen monthly rates soar by double digits to cement the capital as the go-to destination for young professionals. In July, while much of the nation was fretting about utility bills crippling their personal finances, rents in the capital rose 23% year on year, according to estate agency Foxtons, which says the number of renters competing for every property increased 27% over the same period.
The national average rise in rents demanded by landlords was 11.8%, says online agency
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