Business

Rents in the private sector are close to a record high

Rental signs outside property Image copyright Getty Images

Average monthly rents for England and Wales are just £1 behind their all-time high, according to a report.

The buy-to-let index, produced by LSL Property Services, shows average rents rose to £743 in August - a monthly rise of 0.7%. The record high of £744 a month was in October 2012.

Compared with August 2012, they are up 1.3%. However that is still below the inflation rate of 2.7%.

London saw the highest rent increases with prices up 4.8% year-on-year.

Wales saw the second highest jump, a rise of 2.3%, while Yorkshire and the Humber are 1.6% lower than in 2012.

Housing shortage

The overall figures contrast with last month's report which showed that private tenants were experiencing smaller rent increases than normal.

David Newnes, director of LSL Property Services, put this down to stronger demand - due in part to students returning to university and living in rented accommodation.

"Better availability of finance has allowed some households to leave the rental market. And rents certainly felt the short-term impact of that," explained Mr Newnes.

"But releasing a blast of pent-up pressure to buy a home is unlikely to change the long-term trend in renting. Although government schemes are helping, buying a first home is still extremely hard on the back of low salary growth."

LSL owns the property chains Your Move and Reeds Rains.

In response to the survey, Shelter's chief executive Campbell Robb said "Until we get to the root of the problem by building more affordable homes, more and more ordinary people are going to be left behind by our housing shortage."

'Affordable homes'

But the government says it is working to help renters.

"Official Valuation Office Agency figures show that median rents were unchanged nationally over the past year," said the housing minister Mark Prisk.

"However, this government is determined to kickstart a bigger, better private rented sector that gives tenants more choice," he added.

"That's why we're getting Britain building more rented homes, with a £1 billion investment to help developers build to rent and a further £10 billion in loan guarantees to help grow the number of rented and affordable homes."

The findings chime with a recent assessment from the Office for National Statistics in which it found that London rental prices were seeing sharper rises than the rest of the country.

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