Tenants in the UK are paying more rent than ever, after the average monthly cost of renting a home rose to a new record amount, according to new research.
The June 2013 HomeLet Rental Index
shows it now costs an average of £811 per month to rent a property in the UK. This is an increase of 3% during June, and a 5.1% increase from the same time last year.
When the Greater London figure is removed, the June report reveals the average cost of renting a home in the UK is £681 per month, which is an increase of 1.9% from May 2013 – and the highest amount since August 2012 (when the figure was £697 per month).
June’s data shows the increases in average rental amounts appear to be consistent across the UK, with eight of the 12 regions seeing the cost of renting a home rise during June. Wales, the West Midlands and Northern Ireland saw minimal decreases in rental amounts, with the North East seeing the largest monthly drop in average rents of 9.4%.
Andy Richards, HomeLet’s Business Development Director, said: “During this time of year, we do generally see an increase in the number of people renting a new home – particularly students who move into higher yield properties – which therefore pushes average rents up.
“Although the increase to a new record rental amount shows how the private rented sector is still in demand, it also needs to be remembered that tenant income isn’t increasing at the same rate. Data from this month’s HomeLet Rental Index shows the average amount a tenant in the UK earns increased by just 0.8% to £28,000 per annum.
“Yes, rents are going to increase naturally – however, costs are rising at a rate much faster than both inflation and tenant income. With recent reports of increased tenant rent arrears, it appears that maybe those renting a property just cannot afford spiralling living costs.
“I believe increased mortgage availability and confidence in the buy-to-let market could lead to a rise in the supply of rented homes to potential tenants. This could then help to slow the rate of rising rents, which would stabilise the market.
“The Government recognises the need to address the private rented sector, not only to regulate rental amounts, but also ensure a consistent standard across all properties. The London Rental Standard is an example of this that is set to be introduced this year, which includes the plans to accredit 100,000 landlords by 2016.
“Although the property market appears to be recovering - with the Halifax recently reporting house prices seeing their strongest annual increase for more than two years in May - the ability to become a home owner will still be a long-term plan for many. As a result, the private rented sector will continue to grow – however, it’s important to make sure rents are set at levels affordable for tenants so rent arrears do not continue to rise.”
You can read a summary of the June 2013 HomeLet Rental Index by visiting the HomeLet Rental Index
pages of our website.