The March 2012 HomeLet Rental Index shows the average cost of renting a home is now £1,158 per month – which is over 6% higher than the same time last year.
This month’s report also shows the average cost of renting a home around the rest of the UK, excluding Greater London, now stands at £661 per month – an increase of 3% from 12 months ago.
With tenants earning an average of only 1% more than last year, it appears their budgets are being increasingly stretched. Combining this with an increase in rental costs, fuel and inflation, suggests tenants have less disposable income than ever before.
Ian Fraser, HomeLet’s Managing Director, says: “As economic uncertainly continues it’s likely that income could remain flat for many tenants this year, especially with the UK’s economy shrinking once again to enter a double-dip recession, and their income not growing at a proportional rate to rents.
“This is a worrying trend for tenants, and with recent reports saying almost one million people will have been out of work for more than a year by end of 2012, an increasing number of tenants will not only be short of disposable income, but also maybe unemployed and relying on benefits to pay for their living costs.
“Whilst the private rented sector has traditionally provided additional stock for tenants who receive housing benefits, changes to Local Housing Allowance (LHA) means many tenants are facing a predicament when trying to move into a property.
“The changes intended to encourage landlords to lower their rental costs – however, it seems many landlords have chosen not to let their properties to tenants who receive benefits.
Ian continues: “Tenants who receive LHA may be forced to move to more affordable areas outside the capital. As with home ownership, rented accommodation is becoming less affordable in the capital and many household budgets are really being stretched.”
We also update our HomeLet Rental Index pages each month with key headlines and graphics from the report.