‘Bills included’ tops renters’ needs as cost of living crisis bites

‘Bills included’ has become the most popular search term among renters searching for homes on Rightmove, as energy bills threaten to hit £5,000 next year.

The property portal said the term had overtaken ‘garden’ and ‘pets’ as a must-have for tenants.

At the same time Rightmove found renters were widening their searches, with the average search area jumping to 137 square kilometres, nearly double the 2018 average of 70 square kilometres.

The rising cost of bills and rent seems to be driving the changes in tenants’ search habits. Last year ‘bills included’ was outside of Rightmove’s top five search terms.

Bills have been rising dramatically over the past few months. Citizens Advice has warned millions of households are fearing rising energy debts, with half expected to fall into fuel poverty this winter if steps aren’t taken to curb rising energy costs.

And renters are being further squeezed by the lack of properties coming to the market, as homes are being rented twice as quickly as they were two years ago, Rightmove said.

Although the number of new rental properties rose 3 per cent in July compared to the month before, the total number of available homes for rent is still 25 per cent down from this time last year.

Rents are also increasing. The average asking rent outside London is 19 per cent higher than two years ago, up from £949 per calendar month to a record of £1,126.

Rightmove expects rents to keep increasing, forecasting that nationally they will end up 8 per cent higher than last year.

Rising rents may be behind searcher’s decision to look further afield for a place to live, in the hope of finding somewhere affordable. 

The rise in hybrid working during and since the pandemic has also allowed workers greater flexibility as to where they live.

Short supply: Increasing mortgage rates and a decline in tax incentives have seen landlords stop letting their properties, leading to a shortage of homes to rent

Rightmove’s property expert Tim Bannister said: ‘People looking for a new place to rent are casting their net much wider than before, in the hope that it will help them find a suitable place that they can afford. 

‘Although it’s not as constrained as it was a few months ago, the number of homes is still nowhere near enough to meet demand from tenants.

‘The lack of homes is down to more people choosing to stay put and sign longer contracts, some landlords selling up due to more onerous taxes and others taking advantage of record house prices, and hybrid working shifting some demand to more rural and suburban pockets of Great Britain.

‘This has all led to a fiercely competitive rental market in many areas with agents reporting that in some cases properties are being rented out in just a few hours.’

Landlords have seen annual profits nearly halve in the past eight months alone, according to the estate agent Hamptons. 

Prompted by the rise in the Bank of England base rate, buy-to-let mortgage rates at the biggest lenders have risen from 1.25 per cent to 3.12 per cent since October. 

On a £200,000 interest-only mortgage, a landlord would have typically paid £209 a month in October. Today they will typically pay £521 a month, or an extra £3,744 extra per year.

Landlords have also been hit with tax changes over the past few years which mean they can no longer fully offset mortgage costs against tax.

Rightmove says that the result of all these factors is ‘a fiercely competitive and fast-moving rental market’.