Fierce competition sees rents soar

 

Rents soared to a new high last month, with “fierce competition” from frustrated would-be home buyers continuing as the market enters its summer peak, a study said today.

The typical rent in England and Wales rose by 1% to £725 in July, surpassing a previous high of £720 per calendar month recorded in October last year, lettings network LSL Property Services - which owns chains such as Your Move and Reeds Rains - found.

This meant that the pace of annual rental inflation has also increased, climbing to 2.9% from 2.4% in June.

Rents are rising at their fastest on an annual basis in London, climbing by 4.8% to also reach a new high of £1,057.

The private rental sector has seen a surge in demand as people have struggled to get on the property ladder, because they cannot raise a hefty enough deposit or meet lenders' tightened borrowing criteria.

Several mortgage lenders have stepped up competition recently by cutting some of their rates, but much of this has been aimed at less "risky" people with larger amounts of equity.

Borrowers with smaller deposits are expected to have a tougher time taking out a deal amid the uncertain economy.

Rents rose across England and Wales for the fourth month in a row in July and have hit new highs in London for three consecutive months.

David Newnes, director of LSL Property Services, said: "The backlog of frustrated first-time buyers in the private rented sector showed no sign of clearing in July - in fact, it is still growing.

"As lending to those without substantial deposits remains depressed, demand for rented accommodation can only go one way in the long-term - providing further upwards momentum for rents.

"The rental market is also entering its summer peak, as recent graduates and those with new jobs begin to look for new accommodation.

"With more tenants on the move, alongside long-term underlying demand, fierce competition for properties is enabling landlords to increase rental prices to new highs."

On a monthly basis, rents in the South East climbed the fastest, increasing by 2.2% to reach £746.

Rents fell on an annual basis in two regions, decreasing by 1.2% in the South West, and 0.4% in the East Midlands to reach £629 and £546 respectively.

The only regions to see month-on-month falls were the South West and the East of England, which both saw a 0.4% drop. Rents in the East of England fell to an average of £740.

Meanwhile, rents in Wales rose by 1.2% on a monthly basis and by 0.8% year-on-year to reach £552.

Tenant finances also deteriorated for a second consecutive month in July amid the pressure on household budgets due to the tough economy and increased rents, with 9.3% of all rent late or unpaid at the end of the month, an increase from 9.2% in June.

PA

Discover more property articles at Homes and Property
PROMOTED VIDEO
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links