Rents rise to 'record levels'

Fri 18 Oct 2013

Rents across England and Wales hit record levels in September, with the average price paid by private tenants hitting £757 a month, according to research from property firm LSL.

The housing charity Shelter called for the government to "fix" the market, after LSL, which runs the UK's largest lettings agent network, said rents had risen by 1.8% over the month and were £13 a month higher than their previous peak, reached in October 2012.

LSL said rents have never been higher in Wales, the West Midlands, the East Midlands, the north-west, Yorkshire and the Humber, London and the south-east, but there have been dips in some regions.

While in the south-east of England average rents rose by 3.3% month-on-month to £787, in the east of England they dropped by 0.8% to £739.

The cheapest region to rent in is the north-east, where tenants paid an average of £533 a month in September, while the most expensive is London, with an average of £1,141.

Demand for rented properties has been a key driver in rising costs, and LSL said lettings activity was up by 9.2% in the 12 months to September.

The figures cover a period before the launch of the government's Help to Buy mortgage scheme, which is designed to aid people with small deposits to get on the housing ladder.

Source; The Guardian

 

Some commentators have suggested that this will lead to a fall in rents, as tenants are finally able to move out of the rented sector and into their own homes. However, David Newnes, director of LSL Property Services, said he expected demand for rented homes to remain strong.

"Higher rents in almost every region show that, despite government schemes, buying a first home is still a difficult aspiration. This is not only down to low salary growth, but also a general shortage of supply – which is the underlying reason why homes are getting more expensive," he said.

"The long-term trend to renting therefore looks unlikely to change significantly in the near future, despite the better availability of finance compared to previous years."

The LSL figures also showed the total amount of late rent across England and Wales rose to £294m – £30m more than August.

Roger Harding, Shelter's director of campaigns, policy and communications, said rising rents were "devastating news" for England's 9 million renters.

"Every day Shelter hears from people who are having to cut back on essentials as they struggle to pay their rent each month. With wages flat-lining, the fact that rents have reached record highs means that even more people will find it harder and harder to make ends meet.

"We need the government to fix our rental market to provide more security and get on with building many more genuinely affordable homes."

However, the housing minister, Kris Hopkins, said the figures were not an accurate snapshot of the private rented sector. "The latest figures from the Office for National Statistics confirm rents are actually falling in real terms, both in London and across the country."

But he added that the government did want a "bigger and better" rental market.

"This week we've also announced measures that will give tenants the know-how to demand longer-term tenancies that cut costs and meet their needs," he said.

"This new approach will revolutionise the way new homes are built for the rental market, provide more choice and quality for tenants, and increase competition between landlords offering decent, reasonably priced accommodation."

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