Rent rises slow as property market picks up
The cost of renting a home has stalled as an increase in the number of first-time buyers getting onto the property ladder starts to ease pressure on the rental market.
The research from LSL Property Services (which owns letting agents Your Move and Reeds Rains) reveals that rents remained stable in June defying the seasonal increase experienced in each of the last five years.
The average rent in England and Wales now stands at its May level of £737 a month. Rents rose by £1 a month in London, while Welsh tenants saw typical rents fall by £11 compared to May.
As result of this slowdown, rents remain just 2.6% higher than this time last year, comfortably below the rate of inflation, which now stands at 2.9%.
The news is a win-win for letters and buyers. Commenting on the research, David Brown, commercial director of LSL property services said: "The proportion of houses in the private rented sector is still growing strongly. Yet with better access to finance in the first half of this year, the immediate picture has become far brighter for tens of thousands of first-time buyers. And now these green shoots are starting to bear fruit for those still renting too, as milder competition for tenancies has kept a lid on the cost of renting."
While average rents remain steady, five out of the 10 regions analysed saw small rental increases. The sharpest increase was felt in the East Midlands where rents have risen by 0.7% over the last month. The North West and South West also saw rents rise by 0.5%.
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).