Friday, September 16, 2011

Rents rising at record rate in UK

Rents are rising at their fastest pace for a year, up to a record £713 a month.

The LSL Buy-to-let index showed that rents rose 1.2pc in August, leaving tenants struggling to pay monthly bills.

With mortgage finance hard to come by, demand for rented homes is stronger than ever, pushing up prices, Government figures show that one in six homes is now rented, a rise of 1pc since 2009.

Recent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers," said David Newnes, managing director of LSL Property Service. "With significant improvement in the number of buyers able to secure a mortgage unlikely in the foreseeable future, competition for rental accommodation will not drop and further rent rises remain on the cards."

Jonathan Moore, from housesharing site Easyroommate, said that 200,000 more people had had to move into the rented sector in the last year. "Lenders' unrealistic deposit requirements, combined with hefty house prices have left the private rented sector groaning under the strain of demand from frustrated first-time buyers," he warned. "Such strong competition for limited accommodation is taking its toll on rents, and they will continue to climb for as long as the mortgage market remains at a standstill."

Although the news is bad news for tenants, buy-to-let landlords are seeing their income rise. The average yield on a property was 5.2pc in August. On a monthly basis, rents increased fastest in Wales and the South East, where they rose by 2.1pc. The next biggest increases were in London and the South West, where they rose by 1.5pc and 1.3pc respectively. Rents only declined in the Midlands compared to July, falling by 0.4pc in both the West Midlands and the East Midlands. more