Rents rise for fifth month in a row

 

Private rents have soared for the fifth month in a row to reach a new high as pressure on the sector continues to be ramped up, a study has found.

Typical monthly rents increased by 2.9% year-on-year to reach £734 in August, surpassing a previous peak of £725 recorded in July, according to lettings network LSL Property Services, which owns chains including Your Move and Reeds Rains.

The study put the latest increase down to the seasonal effect of a wave of graduates starting new jobs, on top of strong competition already caused by frustrated would-be buyers who are unable to raise a mortgage deposit or meet lenders' toughened borrowing criteria.

Rents rocketed to new highs in five regions across England and Wales, hitting peaks in London, the South East, the East of England, the North West and Yorkshire and the Humber.

London saw the biggest year-on-year increase at 4.9% while only the South West and Wales saw rents decrease, by 1.9% and 1.8% respectively.

David Newnes, director of LSL Property Services, said: "The rental market is right in the thick of its peak season and the demand from graduates and those starting new jobs has added a new layer of competition on top of the existing pool of frustrated buyers.

"London and the South East may be the powerhouses of the national rental market but rent rises haven't been limited to these areas by any means.

"In fact, rents have hit record highs in five regions as tight mortgage finance criteria and large deposit requirements for new buyers continue to ramp up the pressure on the limited stock of rental homes available."

Lenders have predicted that a recently-launched £80 billion "funding for lending" scheme to unclog the flow of credit and a NewBuy scheme, which helps people to buy new-build homes with a fraction of the usual deposit, will help people to get on the property ladder in the coming months.

However, much of the recent competition among lenders has been concentrated around less "risky" buyers with larger deposits of about 40%.

Mr Newnes said: "Some relief for tenants may be found if the funding for lending scheme begins to feed through into greater lending to borrowers with smaller deposits.

"But any improvement to the first-time buyer mortgage market will need to be significant and sustained to dent rental demand markedly in the long-term."

Despite the squeeze on tenants, their ability to keep up with payments improved for the first time in three months in August, with 9% of all rent late or unpaid at the end of the month, a decrease from 9.3% in July.

This could be partly due to a "surprisingly resilient" labour market amid the weak economy, although people will continue to come under pressure as rent rises are outstripping wage growth, the study said.

Shelter chief executive Campbell Robb said: "At a time when wages are stagnating, this latest rise in rents is another blow to the millions of people priced out of a home of their own and left at the mercy of an overheated rental market.

"Many of these people will be struggling to keep a roof over their head, let alone save enough for a deposit on a home of their own."

Here are the typical monthly rents in each region in August, followed by the year-on-year percentage change:

:: London, £1,074, 4.9%

:: East of England,£752, 1.9%

:: South West£633, minus 1.9%

:: Yorkshire and the Humber, £544, 3.6%

:: North West, £591, 2.9%

:: Wales, £548, minus 1.8%

:: South East, £761, 3.9%

:: North East, £524, 0.2%

:: West Midlands, £569, 3.6%

:: East Midlands, £551, 1.0%

:: England and Wales, £734, 2.9%

PA

Discover more property articles at Homes and Property
News
Disruption at Waterloo after a person was hit by a train
newsCancellations and disrupted service after person hit by train
Arts and Entertainment
music
Arts and Entertainment
The almost deserted Liverpool Echo Arena on Monday
tvCan X Factor last in the face of plummeting numbers auditioning
News
Kirsty Bertarelli is launching a singing career with an album of songs detailing her observations of “real life”
news
Property search
Property search
  • Get to the point
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Photographer / Floorplanner / Domestic Energy Assessor

£16000 - £25000 per annum: Recruitment Genius: A Photographer/ Floor planner /...

Ashdown Group: Front-End Developer - Surrey - £40,000

£30000 - £40000 per annum: Ashdown Group: Front-End Developer - Guildford/Craw...

Recruitment Genius: Customer Service Assistant

£13500 - £15000 per annum: Recruitment Genius: A Customer Service Assistant is...

Recruitment Genius: Sales Executive - OTE £35,000

£16000 - £35000 per annum: Recruitment Genius: An ambitious and motivated Sale...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence