The latest HomeLet Rental Index shows the average cost of renting a home in the UK increased by 2.3% during February 2014 to £818 per month – the highest amount recorded for five months.
Although seven of the 12 regions were home to monthly increases, most of these were by a minimal amount – apart from in the Capital where rental amounts increased by an average of 4.5%. The only other two regions to see increases above 0.7% were Yorkshire and Humberside and the South East that saw the average cost of renting a home increase by 2.2% and 1.1% respectively.
Following the 4.5% increase to £1,319 per month, it currently costs almost double to rent a home in Greater London than in regions around the rest of the UK (when the Greater London figure is removed). The 96.3% difference between the Capital’s and the rest of the UK’s rents is the highest ever recorded.
Gary Abraham, HomeLet’s Sales and Marketing Director, said: “The 96.3% difference between renting a home in Greater London and the rest of the UK is a reflection of the strong demand for rental homes in the Capital and a sign of the flourishing private rented sector.
“The recently released English Housing Survey reveals how the number of people living within the private rented sector has almost doubled since the early 2000s. The report also shows how nearly half (44%) of private renters expect it will be five years before they’re able to buy a home – compared with only a quarter (23%) who anticipate they will be in a position to buy a home within two years.
“There’s certainly been a shift in the demographic, expectations and lifestyle of tenants within the private rented sector, and I believe the trend of ‘generation rent’ will continue to grow for the imminent future.
“Our new data reinforces this by showing the average age of a tenant has increased consecutively for the past two years to age 34. From this we can see a wider variety of people, such as families and professionals, are deciding to become a tenant, rather than buy - and prefer the flexibility offered from living in a rented home.
“More people renting than ever also means there are many plans in place to regulate the market. The introduction of a model tenancy agreement, code of practice for letting agents, long-term tenancies and a fees cap are just some of the proposed initiatives being looked into by the Government.
“Rising rents in the Capital show how investment within its private rented sector remains strong. London’s thriving economy is fuelling its rental market, and with people being attracted to the Capital to take advantage of job prospects and higher wages, renting a home is increasingly becoming the lifestyle choice for many.”