Recently, most property news has been all about the massive rise in sale prices since the economic recovery began.
New research has now shown that rents are being affected, too, with prices having risen by 2% in only 12 months.
A study by LSL Property Services found that the average rental price in July was £753 a month – up from £738 a year ago.
This rise in rents has been seen across the UK, with the largest growth occurring in South East England, where prices have gone up by 3.8% – an increase of 0.8% on the previous month. The only area to face a drop in prices was the North East, where prices fell by 3.8%.
Unsurprisingly, the highest rental figures can be found in Greater London, where the average rent stands at a huge £1,143, which is 2.3% more than in July 2013.
The largest percentage rise, however, was seen in our own region: the North West, where rents have climbed by 3% over the same period.
Robin King, Director of Move with Us, commented: “Typically if the sales market improves, the rental market falters and vice versa. However, any fears that the rental market would decline as the sales market sprang back to life have now been allayed. The rental market has continued to grow alongside the sales market. It’s as strong as it’s ever been”.
While this rent rise might be good news for landlords, it comes as less pleasant news to tenants, who have to find ever-increasing amounts of money to secure their preferred properties. Happily, however, the LSL survey also found that the number of tenants in arrears on their rent payments fell over the last year, suggesting that people are more able to afford such expenses than previously, perhaps indicating the wider effect of economic recovery.
At the same time, however, a study by the Resolution Foundation found that an enormous 1.6 million households are forking out over half their monthly income on rent or mortgage payments.
Laura Gardiner, analyst at the not-for-profit organisation, blamed the price rises on housing shortages, stating: “It is vital that more money is invested in the supply of new housing in order to drive down costs, otherwise we can expect to see a steady rise in the number of households that are ‘housing pinched’ over the coming years”.
Whether or not you consider this price surge to be positive, there’s no denying that the rental market is buoyant and that property remains a lucrative investment.
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