Charity reveals 'rent trap' figures

To letThe huge scale of the "rent trap" holding families back from owning their own home has been highlighted by a charity.

Annual private rents have risen by almost £300 year-on-year on average across England and in some areas they have increased by thousands of pounds, Shelter's analysis of Government figures found.
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The charity's report argued that the private rental sector is "no longer fit for purpose" and outgrown its role in primarily providing accommodation for students and young professionals.

Rents rose by 2.8% or £297 annually across England between 2011 and 2012, leaving tenants with little or no leftover cash to save up to buy their own home as wages remained static, the charity said.

The average monthly private rent in England rose to £793 last year, the report said.

Surrey Heath and Elmbridge in the South East were named as the areas with the fastest-rising increases, recording average annual rises of £1,756 and £2,178 respectively. The South East and London, where house prices tend to have held up relatively strongly, dominated the list of areas with the fastest-rising rents.

Rents have soared as would-be home buyers have remained trapped in the rental sector, either because they cannot meet lenders' toughened borrowing criteria or raise the typical 20% deposit.

As more tenants have remained privately renting for longer, this has placed more demand on the sector, pushing rents up even higher. Annual rents rose by more than £500 in one in seven local authorities, Shelter found. The report used figures from the Valuations Office Agency.

Housing minister Mark Prisk said: "Whilst there are local variations, figures from the Valuation Office Agency actually show that median rents were unchanged nationally over the past year. Rightmove have also forecast that two-thirds of landlords are planning to freeze their rents in 2013. For those looking to rent, we're expanding the numbers of homes available, with a £200 million Build to Rent fund and £10 billion in loan guarantees to encourage more investors into the sector."

FirstBuy and NewBuy schemes will help aspiring homeowners buy newly built properties with a fraction of the deposit they would normally require, Mr Prisk added.
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