Business

Rent rises slower than inflation, says LSL

Lettings signs
Image caption Rental rises have been slower than house price rises in recent months

Rents in England and Wales have been rising slower than the average cost of living for a year, according to a survey.

Twelve months of below-inflation rent rises continued in May with a year-on-year increase of 1.1%, the LSL Property Services survey suggested.

Average rent was up by £8 in the last year, to £745 a month in May.

However, regional variations mean average rent in London is more than twice that of north-east England.

Average rent in London in May, the survey said, was £1,124 compared with £513 in the North East.

Yet the annual price rise in London was below the average rise of England and Wales, at 1%. The North East saw a 3.6% year-on-year fall.

"London is a dramatic example of how a prospering housing market can feed through to tenants," said David Brown, commercial director of LSL Property Services.

"In absolute terms, the capital is naturally more expensive to live in than elsewhere, but the pace of change is now going in the right direction. In the last year, London's annual rent rises have dropped from highs of almost 8% a year to only 1%.

"Elsewhere, six other regions have seen the same trend, with annual rent rises lower than a year ago. Thanks to landlords, rents are now rising across England and Wales at a third the pace of a year ago."

Despite rent rises being below inflation, they have been more in line with average wage rises.

The most recent figures show that average wages grew by 0.7% in the three months to the end of April, according to the Office for National Statistics (ONS).

The survey by LSL, which owns national lettings chains Reeds Rains and Your Move, is one of relatively few estimates of rental costs.

The latest survey by the ONS, published in April. found that private rental prices paid by tenants in Britain rose by 1% in the 12 months to March. This included a 1% increase in England, a 1.3% rise in Scotland and a 0.6% rise in Wales.

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