The March 2013 HomeLet Rental Index shows the average cost of renting a home in the UK rose by 3.3% during the first quarter of 2013 to £776 per month. In contrast, the average amount a tenant earns every year rose by a minimal 0.8% over the same period to £27,300.
Although the 3.3% rise is much higher than that of tenant income, the increase in rents appears to have slowed down. Data from this month’s report also shows the average cost of renting a home in the first quarter of 2012 increased by 3.4% and a significant 6.9% in 2011.
Andy Richards, HomeLet’s Business Development Director, said: “Although rents haven’t increased at such a high rate in the first quarters of 2011 and 2012, tenants appear to have less disposable income as their salary has only increased by a minimal amount. With less money to save for a mortgage, this could increase tenancy lengths as tenants may not have the funds to purchase their own home - which may then decrease the number of available rental properties.
“Other data from this month’s HomeLet Rental Index shows the percentage of unemployed tenants moving into a new rented home increased over the past 12 months by 6%. A reason for this could be the gradual decline of social housing. With less of this type of accommodation available, it appears the private rented sector is becoming the only option for those who rely on benefits – which again strains the supply of rental homes.
“The Government’s recent announcement to grant an extra £1 billion for the Build to Rent and Build to Let schemes should start to address the supply and demand issue within the private rented sector. This will not only benefit letting agents who could have an increased number of properties to market, but also landlords who will be able to accommodate an increased amount of tenants.”
For more information, please email HomeLet's Marketing Team.