Rent hikes finally slow: what's next?
There's good news this month, as the rate that rents are rising at has finally slowed. But is the beginning of some real relief for renters, or will the pain continue?
Rises slowMost renters won't be heaving a huge sign of relief. After-all we're not saying rents are falling, we're just saying they're not rising quite as fast as they once were. In fact, the average monthly rental bill has risen to a new high of £720 a month.
However, after a period when rent rises knew no bounds, there is good news for renters lurking deep within the figures, from LSL Property Services, because rents rose just 0.2% in October, the slowest rate of increase since February. It means the annual increase is now 4.1%.
Around the countryIn some parts of the country, rent rises remain incredibly painful. Over the last month, rents in the South East rose 1.5% and in the East of England they climbed 0.8%. Over the course of the year the fastest-rising rents are still in London, where a month in a property will now set you back an average of £1,030 - 5.7% more than this time last year.The next biggest annual increases were in the West Midlands and the South East where rents rose 4.6% and 4.4% respectively.
Within the figures there are actually a few falls. Rents fell in three regions on a monthly basis, dropping by 1.4% in the North East and the South West, and by 0.8% in Wales.
What next?However, the researchers warn that this is more likely to be a sign of the seasonal slowdown in the run up to Christmas than any underlying pattern. They say the pain for tenants is just going to get worse.
David Newnes, director of LSL Property Services, commented: "Although buy-to-let lending has picked up steam, which has helped expand the supply of rental properties, it is still a long way boosting supply enough to ease competition amongst prospective tenants. With no sustained meaningful increase in lending in light of the ongoing Eurozone crisis, we are unlikely to see a sustained drop in the number of frustrated buyers in the coming year, and underlying demand for limited accommodation will continue to push up rents in the long-term."
Many tenants are teetering on the brink already. The same research showed that 10.1% of rent is already late or unpaid. In October, unpaid rent totalled £287 million, an increase from the £243 million unpaid in the previous month.
And as rents keep rising and wages stay static, we are going to see more and more people forced into unsuitable accommodation or heading into a financial nightmare - crushed between the rock of rising rents and the hard place of unaffordable property.
But what do you think? Do you rent? Are you a landlord? Can this level of rent really continue without precipitating a crisis?