Inception/Warner Bros.

Rents in Britain are counter-intuitively cratering despite a severe housing shortage.

When there is too little supply to sate demand, property prices rise. And in turn, housing becomes increasingly less affordable. That leads to more and more people turning to the rental sector because they cannot afford to buy a home. That should push up rents as more people fight for the same rental properties.

Technically, rental prices should be going up alongside purchase prices.

However, according to a huge new chartbook by HSBC on Britain's housing market, rental prices are falling dramatically, turning market fundamentals in on their head.


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