No respite for renters as rates rise again
Private rents rose 0.6% month-on-month in July to a record high of £705 a month on average and taking annual rent inflation to 4.2%, according to LSL Property Services.
This is the sixth month in a row rent has gone up in England and Wales and renters are now paying £29 a month more than they were a year ago.
Geographically, rent in London has increased the fastest. In the capital, rents are now 7.1% higher than this time last year and renters pay on average £1,009 a month.
Meanwhile, the north-east of England saw a 5.5% increase and the East and West Midlands experienced a rise of 4.8%.
The only region not to have seen a rise is Wales, where rents have remained the same.
Rising rents are making it harder for first-time buyers to save a deposit and get on the property ladder and LSL says it is now becoming more common for renters to borrow money from their parents to buy their first home.
David Newnes, spokesperson for LSL, says rents are on an upward trajectory, and it is unlikely that tenants will gain respite any time soon.
"Demand from thousands of frustrated buyers each month is underpinning buoyant competition for rental homes, enabling landlords to increase prices.
"The increasing cost of rental accommodation – alongside the soaring cost of living – is eroding first-time buyers' ability to save deposits. But first-time renters are also keenly feeling the pinch. As rents climb, so does the size of the average deposit a new renter must find," he adds.
|AREA||RENTS FOR JULY||ONE MONTH CHANGE||ANNUAL CHANGE|
|East of England||£731||0.1%||0.7%|
|Yorkshire and the
|England & Wales||£705||0.6%||4.2%|
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
The catch-all term applied to investors who buy properties with the sole intention of letting them to tenants rather than living in them themselves, with the proceeds from the let usually used for the repayment of the mortgage. Buy-to-let investors have to take out specialised mortgages that carry higher interest rates and require a much bigger deposit than a standard mortgage. Other expenditure can include legal fees, income tax (on the rental profits you make), capital gains tax (if you sell the property) and “void” periods when the property is unlet.