Rent rise is fastest for a year, says LSL
- 16 September 2011
- From the section Business
The cost of renting a home rose at its fastest rate in a year - with the average tenant paying £713 a month, a survey has said.
Tenants paid 1.2% more on average to rent a property in the UK in August than they did in July, according to LSL Property Services.
The cost rose quickest in Wales and the South East of England in the last month.
Tenant arrears increased for the first time since April, the survey added.
"We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months," said David Newnes, LSL's estate agency managing director.
"Recent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers.
"In the last two years, average rents have risen by more than £50 a month."
Mr Newnes said he expected further rent rises in the coming months.
This is bad news for people like Marc Mclean, who has been renting since 1992 and is hoping to buy his first property.
He said he had saved up £20,000 for a deposit to buy a home, but was now getting mixed messages as to whether it was a good time to buy.
"I am 38 and I want to get a mortgage paid off by the time I retire," said the NHS service manager, who lives in north London.
"Renting at the moment is affordable, but lots of people say that renting is dead money. I am 70% sure I want to buy."
He said his concern was that his property would fall in value if he bought it in the current economic climate.
The survey from lettings agent LSL, which owns Your Move and Reeds Rains, suggested that London had seen the biggest rent rises in England and Wales in the last year, rising by 6.6%, followed by a 6% rise in the West Midlands and a 4.3% increase in the North East of England.
The only fall was in Yorkshire and the Humber, where the cost of renting a home dropped by 0.5% in the last year, it suggested.
Tenant arrears increased for the first time since April, with 10.7% of all UK rent unpaid or late by the end of August. This was up from the 9% of rent unpaid or late in July.
However, Mr Newnes said there was often a short-term blip in tenant arrears in August, as summer holiday costs squeezed family finances.