'Real' cost of renting rises for first time in a year
08-16-2014
The fastest annual increase in rents was recorded in the South East, showing a 3.8pc rise to £775
By Press Association
Private sector rents are back on the increase in real terms for the first time in more than a year, a major lettings network has reported.
The average monthly rent across England and Wales increased by 2pc in the 12 months to July, edging higher than the 1.9pc rate of Consumer Price Index (CPI) inflation, according to LSL Property Services, which owns national chains Your Move and Reeds Rains.
Rents first dipped below inflation in June 2013 and continued on a trend of below-inflation increases up until last month, LSL said. The average monthly rent now stands at £753.
The fastest annual increase was recorded in the South East, where rents typically stand at £775, showing a 3.8pc uplift on a year ago. This is followed by a 3pc annual increase in the North West, where average rents are £594, and a 2.3pc year-on-year rise in London, where the typical monthly rent is £1,143.
In Wales, rents are up by 1.2pc year to reach £562 on average. The North East is the only region where rents have fallen over the last 12 months, edging down by 3.8pc to reach £507 typically, LSL said.
David Newnes, director of LSL, said rent rises are still "modest" when it is borne in mind that this is usually a busy time of year as the market gears up for the rush of students in the autumn.
The findings also coincide with several recent reports into the housing market which have pointed to the pace of activity cooling off slightly.
The Royal Institution of Chartered Surveyors (Rics) said yesterday that the number of potential home buyers coming into the market fell back in July for the first time in a year and-a-half.
A shortage of properties to choose from has been blamed for pushing up both rents and house prices in recent years.
Campbell Robb, chief executive of charity Shelter, said: "Our lack of affordable homes and sky-high house prices are leaving more and more families with no choice but to live in unstable and expensive private renting, with many struggling to make ends meet.
"We hear from people every day having to cut back on essentials because they can barely make their rents each month, let alone save for a home of their own."
LSL said that despite the uplift in rents, tenants are continuing to get more on top of their finances, against the backdrop of an improving employment situation.
Tenant arrears now represent just 7.3pc of all rent, falling from from 8.1pc a year ago.
Mr Newnes said: "Unemployment is by far the greatest threat when it comes to tenant arrears. So a string of positive surprises on this aspect of the labour market have helped to drive enormous improvements in levels of late rent since 2009.
"Weak earnings do matter too, but are less devastating for household finances than losing out on the chance of any wage at all."
LSL's figures are based on rents achieved on around 20,000 properties across England and Wales.
