The average cost of renting a home in the UK is heading towards £1,000 a month, figures showed on Monday, with rents in the south-west of England rising faster than anywhere else in the country.
The latest data from buy-to-let insurer and reference provider HomeLet showed that the average monthly rent on new tenancies signed between May and July was £977. This was more than £100 higher than the same period of 2014, when the average UK rent stood at £874.
Demand from tenants has been rising as, despite the return of mortgages for those with small deposits, high house prices have continued to lock many would-be buyers out of the market.
Recently, it was predicted that by 2025 more than half of those aged under 40 will be living in private rented accommodation, and competition for homes is driving up rents in many parts of the country.
HomeLet’s index – which is based on tenancies set up through letting agents around the UK – showed year-on-year rent increases everywhere except the north-west of England, although the size of the rises ranged from just 1.1% in Wales to 11.4% in the south-west.
Rents are highest in Greater London, with new tenants signing up to pay £1,538 a month for their homes. This was up by 9.5% year-on-year, an annual rise outstripped by price increases across most of the rest of the south of England.Over the past year, rents on new contracts in the south-west have increased by almost £100 to an average of £914 a month, and the south-east has also seen a double-digit rise, up by 10.3% to £968.
In Scotland, too, rents have leapt, with an annual rise of 11.2% bringing monthly costs to an average of £667.
Martin Totty, chief executive of HomeLet’s parent company, Barbon Insurance Group, said: “The July HomeLet Rental Index demonstrates just how broad-based the rise in rent prices has now become – this is a UK wide trend.”
He added: “The south-west of England, for example, is benefiting from its popularity with those attracted to the area for lifestyle reasons, as well as the strong local economy in many of the towns and cities of the region.”
In April, tenants in Bristol demonstrated outside a letting agent which had written to local landlords suggesting that they could put up rents.
An action group in the area, Acorn, was involved in the protests and runs a campaign for ethical lettings. Nick Ballard, community organiser at Acorn, said numerous tenants had been in touch reporting similar letters to landlords, with one recently stating rents had risen by 13.6% over the past year.
“With wages stagnant and cost of living and employment insecurity rising exponentially, tenants are struggling to keep pace with rapid rent hikes,” he said.
Ballard said the house next door to his had just been let for more than double what he pays “and is currently occupied by eight people struggling to cover the cost”.
He added: “A further effect of these increases to what was already our biggest single expense is on tenants’ confidence in asserting their rights.
“Despite the Deregulation Act that comes into force in October, revenge evictions will remain a very real threat and the severe shortage of affordable rental properties results in a race to the bottom with increasingly desperate private tenants enduring disgraceful conditions for fear of eviction and subsequent homelessness.”