July was a record month in the private rented sector, after rents across the UK reached new highs, including in the Capital where tenants are now paying almost £1,300 per month, according to new research from HomeLet.
The July 2013 HomeLet Rental Index shows six of the UK’s 12 regions rose to new record amounts, including Scotland (£627), the North West (£657), the East Midlands (£580), Yorkshire and Humberside (£607) and Wales (£603).
Tenants in Greater London area also paying all-time-high rents, after the average cost of renting a home in the Capital increased annually and monthly by 2.1% to reach £1,297 per month.
These records rents have pushed up the national average. This month’s HomeLet Rental Index shows the overall average cost of renting a home in the UK increased by 1.8% during the month to £826. This is the highest amount ever recorded, and the second consecutive month for the UK average to hit a new high.
Andy Richards, HomeLet’s business development director, said: “Record rents have been recorded from regions across the whole of the UK, which suggests demand for rented homes is at its highest no matter which region people live in. However, Greater London remains 86.4% more expensive than the rest of the UK, with tenants in the Capital now paying almost £1,300 per month to live in a rented home.
“The average amount a tenant earns increased by 1.3% during the past month to £28,500, which is also 2.5% up from the same time last year. Average rents increased by 1.8% and 3.6% during the same time periods though, suggesting tenants are paying the price for the increase in demand.
“Regulation of the private rented sector and lettings agents’ fees have once again been widely reported recently. However, this could lead to even steeper rises in monthly costs if fees are passed to tenants through an increase in rents. Yes rental amounts are going to increase along with inflation – but it appears tenants may have to pay the price for new regulation, which ironically is supposed to make things better for them. Tenants already seem to be facing increasingly expensive rental prices due to the lack of mortgage availability, so it will be interesting to see if the new Help to Buy scheme helps to ease the pressure on the industry that’s essentially hitting our tenants’ pockets.
“The London Rental Standard that was launched at the end of July is a great start to improving the quality of rented homes within the Capital, which hopefully will set a precedent for the rest of the UK. There are arguments for and against rent control – but to maintain confidence within the market, the fundamental element of providing a decent home must be met from landlords to make sure tenants are not forced to live in sub-standard properties.
“Focus on tenants mustn’t be lost. The private rented sector offers a fantastic housing solution to millions of people within the UK – especially during the so-called housing crisis. However, record rents, and stagnant income means some tenants are out of pocket and unfortunately not able to meet living costs (according to a recent Money Advice Service survey).
“With this is mind I hope the Government can work with investors, landlords and lettings agents to make sure all parties involved benefit – and especially the people at the heart of the industry – the tenants.”