Private rents reach record high

Rent signsPrivate rents have reached a new high despite Government efforts to make it easier for people to jump onto the housing ladder, a lettings network has reported.

Rents across England and Wales reached a record £757 a month on average in September after jumping by 1.8% month-on-month, according to LSL Property Services, which owns chains Your Move and Reeds Rains and has been monitoring rents in this way since 2008.
Record rents were recorded in seven out of 10 regions across England and Wales, in what charity Shelter described as "devastating" news for tenants.

Rents reached new peaks in Wales, London, the South East, the West Midlands, the East Midlands, the North West, Yorkshire and the Humber. Average rents in September ranged from £533 a month in the North East to more than double this amount (£1,141) in London. Rents are now typically £13 higher than a previous high recorded in October 2012.

The rises coincided with a setback in tenants' finances. Some 8.5% of all rent was late or unpaid at the end of September, up from 7.8% in August, although the latest figure is still an improvement compared with September 2012 when 9.1% of rents were in arrears.

Rents have risen by 2.1% over the last year across the country, which is below the rate of Consumer Prices Index inflation at 2.7%.

But in London rents have soared by 4.4% typically in the space of a year, according to LSL. Wales saw the next biggest annual rise, with a 3.1% hike pushing average rents to £573.

The East of England was the only region to see rents drop, either on the year-on-year or the monthly measures. Rents in the East have fallen by 1.4% annually and by 0.8% compared with August to reach £739 typically.

The findings show how strong levels of demand for homes are persisting in the private rental sector, despite a string of Government measures designed to ease the leap onto the property ladder.

A new phase of the Government's flagship Help to Buy scheme to offer state-backed mortgages to people with deposits as low as 5% was launched this month. Halifax, Bank of Scotland, Royal Bank of Scotland (RBS) and NatWest have started offering deals under the scheme, with other major lenders including HSBC, Santander and Barclays planning to join at a later date.

Mortgage lenders have been handing out more loans to first-time buyers in recent months than at any other time since the credit crunch started.

But critics argue that more needs to be done to tackle the underlying problem of a shortage of homes, both for sale and for rent.

Roger Harding, Shelter's director of campaigns, policy and communications, described the latest figures as "devastating news" for renters and show that it is still hard to get on the housing ladder.

He said: "As more people are priced out of home ownership and waiting lists grow longer, too many families are being left trapped in the unstable and expensive private rental market.

"Every day Shelter hears from people who are having to cut back on essentials as they struggle to pay their rent each month. With wages flat-lining, the fact that rents have reached record highs means that even more people will find it harder and harder to make ends meet.

"We need the Government to fix our rental market to provide more security and get on with building many more genuinely affordable homes."

David Newnes, director of LSL Property Services, said: "Higher rents in almost every region show that, despite Government schemes, buying a first home is still a difficult aspiration.

"This is not only down to low salary growth, but also a general shortage of supply - which is the underlying reason why homes are getting more expensive."

The findings are based on rents achieved on 20,000 properties.

Housing Minister Kris Hopkins said:"These figures are not an accurate snapshot of the private rented sector.

"The latest figures from the Office for National Statistics confirm rents are actually falling in real terms, both in London and across the country.

"But this Government wants a bigger and better rental market. That's why we've introduced the £1 billion Build to Rent fund, which has already identified 45 potential schemes, alongside £10 billion of Government-backed guarantees to encourage more institutional investment in the sector.

"This week we've also announced measures that will give tenants the know-how to demand longer-term tenancies that cut costs and meet their needs.

"This new approach will revolutionise the way new homes are built for the rental market, provide more choice and quality for tenants, and increase competition between landlords offering decent, reasonably priced accommodation."
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