Business

Rents 'at highest for two years' as landlords sell up

Lettings boards
Image caption Reluctant landlords have been selling up, the survey suggests

Average rents in the UK have reached their highest level for two years as landlords sell up, a survey suggests.

Increased demand from tenants reluctant to buy in the current economic climate has also added to the upward pressure on prices, LSL Property Services said.

The group said that average rents had risen for seven consecutive months, increasing by 1.4% in August.

A separate poll for mortgage lenders suggested people still had a strong appetite to be homeowners in the UK.

The survey, of just over 2,000 people, for the Council of Mortgage Lenders (CML) said that 85% of those asked wanted to own their own home in 10 years' time.

Affordability

LSL said that the average monthly rent in the UK had reached £686, as a result of supply and demand pressures.

"Rents are jumping up as more and more potential home buyers opt to rent," said David Newnes, LSL's estate agency managing director.

"People are wary of a crash in house prices and concerned over the effect of government cuts on their own ability to meet long-term financial commitments. Additionally, many can not get a mortgage at an affordable rate.

"Furthermore, the huge number of reluctant landlords we saw renting out property last year have now had the opportunity to bank their gains and sell up."

Reluctant landlords are those who decided not to sell when house prices were in a slump, but rented out their home instead after moving away.

The survey found that rents in the South East of England rose the most - by an average of 2.8% - but dropped by 1.5% in the West Midlands.

The poll for the CML found that although the long-term aspiration of home ownership had changed little, the short-term likelihood of owning a home had dipped slightly.

This reflected the fact that only 42% of those aged between 18 and 24 would prefer to live in a home they owned in two years' time.

A recent survey of 1,326 UK renters, by flat and house share website Spareroom.co.uk, found that a third of those asked and currently renting did not believe they would ever be able to afford to buy a property.

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