Rents are rising, even in cities where there is an excess of empty flats and houses, despite interest rates kept non-existently low. I might have discovered one reason why.
A friend moved from abroad to study in a northern city. After spending some time living London, where rent is ridiculous, she had limited time for flat-hunting in this new home-town, but found a room, decent but nothing special, slightly out of the centre but close to transport links (everywhere’s close to the bus train etc, but she didn’t know that.)
Her jovial landlady/flatmate set the rent at the same level as a small one bed flat, just thirty pounds under many local two-beds. My friend had no idea. I resented what the landlady had done, especially when she moved out and let her own room to another overseas student, who also knew no better and needed a home fast, thereby covering both her entire mortgage and her rent.
I met this woman a few months ago. She’s nice and everything – really friendly and tolerant, and allows her tenants use of her household nick-nacks knowing they are unlikely to have bought them across from overseas. We were discussing rents, and she asked me how much I paid. Whilst trying hard not stir up trouble for my friend (who was sitting next to her) I answered: the same as my friend pays for her room. She was aghast. I said it’s not in the best of areas, but neither is it in the worst. It’s the going rate for such a place.
She disagreed. She said she’s paid that for a flat five years ago, which was true, but her home then was an excellent flat in a really desirable area, where rents haven’t risen much as they were stratospheric to begin with. She’d never compared the cost with other local room rates, and I think that’s how landlords set prices: think of a number, double it, add some more and see what sticks: massive profit for them, misery for tenants.
There is no excuse for rocketing rents anywhere outside of London and even there rent rises are market rather than interest rate led. When interest rates rise, there will be further misery, as tenants – already squeezed – will be expected to cushion the same landlords who haven’t lowered rents when interest rates were low.
I checked again: the only flats rented out for as much as she was asking were genuine luxury flats with champagne fountains and lifts up to the sofa, not bog-standard two beds, no matter how near a train station.
It’s wrong that there is no rent officer to intervene when landlords are greedy, ripping off tenants who don’t know any better. How this woman looked my friend in the face every morning without falling to the floor and begging for forgiveness is a mystery to me. Amazingly, they are still mates. How tolerant of my friend. How cynical of her landlady.