Rents reach record highs in five regions

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Rents have risen for a fifth consecutive month with tenants seeing record highs in five regions in August, according to the latest Buy-to-Let Index from LSL Property Services.

The index - based on analysis of approximately 18,000 properties across England and Wales – has previously been used by the Government to demonstrate that rents had fallen in the wake of local housing allowance caps in the private rented sector.

In England and Wales the average rent rose by 1.2% to £734 per month in August, surpassing July’s record high of £725. Rents climbed by 2.9% compared to this time last year.

The LSL index shows rents have hit new peaks in London, the South East, the East of England, the North West and Yorkshire & the Humber. On a monthly basis, rents rose in eight regions.

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.

“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 rental increase, tenant finances 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.

In total, late or unpaid rent amounted to £288m, 2.2% less than in the previous month.