Rents Still on the Rise!

by Mark Johnston

Rents Still on the Rise!

With social housing usually unavailable and home ownership unaffordable for many first time buyers, renting privately is often the only option for many households.

In April 2013 the Office for National Statistics (ONS) announced that home ownership had fallen for the first time in a century.

buy to letFundamentally, buying a home is still becoming less affordable, not more and therefore some industry experts believe that by the middle of this decade at least one in five people in the UK will be living in privately rented accommodation.

Therefore it seems that tenant demand continues to remain high.

Stephen Nation, Head of Lettings at the 300 branch Sequence Group which includes Barnard Marcus, William H Brown, Fox & Sons and other leading brands, states “As we predicted, August has been another record breaking month, with the number of new tenancies up 8 per cent on last month and 17 per cent annually.”

At least 86 per cent of landlords see little change in the market for at least the next 12 months, with only 6 per cent of landlords suggesting demand will drop, according to a new survey.

At least 86 per cent of landlords see little change in the market for at least the next 12 months, with only 6 per cent of landlords suggesting demand will drop, according to a new survey.

It also appears that there is also a better availability of buy to let mortgages.

Buy to let mortgage applications are up 31 per cent annually, the highest increase for over two years, which indicates that buy to let is still unchallenged as a popular investment.

According to the Bank of England, the Funding for Lending Scheme combined with other financial initiatives have allowed the banks to lend a record breaking £5 billion in buy to let mortgages.

Recent statistics have revealed that  the national average rents have broke records yet again, increasing 4 per cent in August and 11 per cent annually to £779,  an 11 year high.

The supply of new properties to the market has seen little to no change in recent months and if this continues to be outstripped by demand then we will see further significant rises in rents.

A new report from the resolution foundation, a think tank, claims that a third of Britain is effectively off-limits to lower income working families because private rents are unaffordable.

Rents are now hovering around their peak at an average £737 month, says leading letting agent LSL Property Services.

In the 12 months to August 2013 private rental prices paid by tenants rose by 1.2 per cent, the Office for National Statistics latest Index of Private Housing Rental Prices has revealed.

George Spencer, chief executive officer of online lettings company Rentify, said: “Rents rose modestly over the past year as far as the national average is concerned.”

Lucy Jones, of LSL Property Services, producers of the Buy to Let Index, predicts that by mid-2015, average rents in England & Wales will reach £800 per month.

 

 



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