Rents rise slowly to record levels
The average rent in England and Wales is now £744 per month
Average rents in England and Wales rose by 0.4% in October, the slowest rate of increase since May, according to LSL Property Services.
This means rents are 3.4% higher than at the same point last year, a new high of £744 per month. A second set of UK statistics from Adzuna.co.uk. suggests a slightly different figure, an average monthly rent rise of 0.2%.
In London and the South East, LSL say the rents went up 0.9% and 0.7% respectively. Five regions saw rents fall in October, with the sharpest falls in Wales (1.6%) and the East Midlands (1.8%).
On an annual basis, rents rose the fastest in London, increasing by 7% to £1,102.
“Rents may be rising but the good news for tenants is that the rate of increase is at its lowest in five months," David Newnes, director of LSL Property Services comments. "Looking ahead, it’s difficult to see rents remaining stationary once the winter lull has passed.”
Figures from HomeLet suggest that tenants who rent a home in Greater London are now paying almost a third more than in October 2009. They put the average rent increase in Greater London at more than 6% since October 2011 to reach £1,240 per month. This would mean renting a home in the capital is 32% higher than October 2009 when average rents were £940 per month.
In contrast, the average cost of renting a home around the rest of the UK, excluding Greater London, increased by 7% from 2009 to 2012 (from £619 to £663 per month).
Ian Fraser, HomeLet’s Managing Director, said: “Our data shows that on average tenants outside of London are now paying £44 more per month for a rented home when compared to 2009, but in contrast tenants in London are paying an average of £300 more per month.
“People relocating to Greater London for employment are helping to drive the increasing demand for rental properties, and are subsequently driving up average rents. With a lower volume of people buying their own homes in the Capital because they’re priced out of the market, the private rented sector within Greater London is being increasingly strained."
In the buy-to-let sector, Connells reported the number of valuations rising by 10% compared to October 2011. While valuations for new buy-to-let mortgages showed a monthly fall of 6%, buy-to-let remortgaging was up 11% from September levels.
John Bagshaw,, Corporate Services Director of Connells said: “Even if credit conditions ease in the next year, it will take a long time before the number of people buying their first home reflects pre-crisis levels, and private rental will continue to expand as landlords look to cater for the UK’s growing population.”
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