by Mark Johnston
Housing charities have warned that rents are becoming unaffordable for many people. Shelter has stated that private rents in particular are now unaffordable in 55% of English boroughs.
Carolyn Mellor, of Manchester based estate agents Homes4u, said “historically, we have been a nation of home owners, but we have started to see a shift in the way people live, a shift which could well gather pace in the future”.
The banking crisis also had a significant impact on those trying to buy their first homes. As a result, many first time buyers realised they needed to save a lot more than they had expected to for a deposit. In the meantime they still needed somewhere to live and this often cam through the private rental sector.
A survey suggested that the cost of renting a home in England and Wales fell for the second month in a row in December 2011. The average rent fell by 0.8% in December compared with November. However, renting was still 4% more expensive than the previous December.
Although this said, annually rents rose in all but two regions in December 2011, they were the South-West of England and the North East of England.
“It may be premature to say the UK rental market has peaked, what we are probably seeing is a temporary blip, a natural cooling off period for the rental market”, according to Matt Hutchinson, director of flat and house share website spareroom.co.uk.
Other surveys have shown that rents in the UK are set to stabilise in 2012, rising only in line with inflation and salary increases. However, as always with these national surveys there are regional fluctuations.
More recently according to LSL property services ‘rents are back on the rise’, the typical rent rose by 0.1% in January 2012 to around £712 a month in England and Wales.
This is the first month on month rise since October 2011 and also marks the first time there has been a rent rise in the month of January since records began.
David Newnes, director of LSL property services predicts more rent increases as housing market transactions remain low. He also suggests that “the rental market burst back in to life unseasonably early in January, with tenants on the move trying to take advantage of what is usually a quieter period for the rental market”.
A strong rental market and a weak selling market has provided a rental practice known as ‘double renting’, where home owners who are struggling to sell their existing property, rent it out, whilst moving to a cheaper rental property elsewhere.
Also tenants are staying put for longer periods amid rent hikes. The Association of Residential Letting Agents (ARLA) stated “typically they are renting homes for a record duration of 19 months”.
In January 2012, 10.7% of all rent was either late or unpaid at the end of the month, according to letting agents and landlords. This figure is too on the increase.
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