Private rents 'hit record high'

Some 8% of rents were paid late or not at all in August, which is the highest level of people struggling with their budgets seen since last Christmas.

The findings have sparked fresh fears for the ability of “generation rent” to find affordable homes.

On a month-on-month basis, rents have jumped by 1.1% compared with July, according to the report, which is based on rents achieved on around 20,000 properties.

LSL’s records go back to January 2008.

David Newnes, director of Your Move and Reeds Rains, said this time of the year traditionally saw a scramble to take up new tenancies, as students returned to university and people moved home to take up a new job.

He said: “Autumn is when more people move to take up new opportunities, to build new careers and to start new chapters.”

Average rents in seven out of 10 regions of England and Wales were higher than a year ago.

The South West recorded the strongest year-on-year rise, with a 3.5% uplift taking the average monthly rent there to £651.

The South East recorded the next highest year-on-year increase, with rents increasing by 3.4%, to reach around £788.

These two southern regions also recorded the strongest month-on-month increase in rents of the regions, both seeing a 1.7% increase.

Rents in Wales, the West Midlands and the North East were lower typically than they were a year ago.

Private sector rents have lifted to a new all-time average high of £761 a month as the peak season for tenants snapping up new homes gets under way, a major lettings network has reported.
Rents saw a 2.4% increase in the 12 months to August across England and Wales, meaning they have edged £3 higher than a previous record set in October 2013 of £758 a month on average, according to LSL Property Services, which owns chains Your Move and Reeds Rains.
The state of tenants’ finances worsened as rents reached their new record levels.

The North East had seen the biggest annual drop, with a 1.6% decrease taking the average monthly rent there to £515.

But on a month-on-month basis, rental increases in the North East matched those in London, with both regions recording a 1.5% increase.

The average monthly rent in London now stands at £1,160, after increasing by 3% year-on-year.

The typical monthly rent in Wales was £561, which is 0.1% lower than a year ago and down by 0.3% month-on-month.

The findings come after figures from the Office for National Statistics (ONS) showed this week that a first-time buyer faced having to pay 13.5% more for a starter home than they did a year ago, with the typical cost now standing at £209,000.

Data from the Council of Mortgage Lenders (CML) showed that the number of mortgages handed out to first-time buyers passed 30,000 in July, marking the first time this has happened during a one-month period since August 2007.

But first-time buyers were typically having to borrow record amounts to get on the property ladder, with the average size of a new loan taken out by this sector standing at £127,500 in July, according to the CML’s figures.

The CML said previously that in general, it expected a gentle slowing of mortgage lending activity in the coming months, amid signs that the London housing market was starting to soften.

Stricter mortgage lending rules also came into force in April, which forced home buyers applying for a mortgage to provide more evidence about their spending habits, in order to prove that they could truly afford their loan, and the CML said there were signs that borrowers’ appetites may be “starting to wane”.

Rent increases have generally been following a more gentle path since the housing market recovery started to get into full swing last year.

More people found it easier to make the jump out of renting and onto the property ladder as a flood of low-deposit home loans entered the market following the launch of the Government’s Help to Buy scheme.

But in July, rents recorded above-inflation increases for the first time in more than a year, according to LSL’s records.

The 2.4% year-on-year annual increase in rents recorded in August was also above last month’s 1.5% Consumer Price Index (CPI) rate of inflation.

Campbell Robb, chief executive of charity Shelter, said: “Successive governments’ failure to build enough affordable homes and soaring house prices are leaving more and more families with no choice but to live their lives in expensive and unstable rented homes, never certain of what the future holds.

“And sky-high rents mean hopes of escaping the ‘rent trap’ are fading fast for many.

“We hear from people every day who can barely keep up with their housing costs each month, making saving for a home of their own a mere pipe dream.

“Our politicians have got to get serious about building the affordable homes we urgently need and give ‘generation rent’ the chance of a stable home.”

Housing Minister Brandon Lewis said: “The LSL figures are an inaccurate reflection of the private rented sector, their methodology exaggerates rent increases by only looking at new contracts. ONS statistics of new and existing rental properties show that rents have fallen every year in real terms under this Government, both in London and across the country.

“This Government is working to build a bigger, better private rented sector including a £1 billion build to rent fund which will deliver 10,000 new homes specifically for private rent, and a model tenancy agreement to give both tenants and landlords certainty.”

“This approach is providing more choice and quality of homes for tenants, and increasing supply, without wrapping the sector up in unnecessary red tape.”

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