April 26, 2011
Tenants across the UK have seen their rental prices increase for the second consecutive month this march, as demand for rental property continued to outweigh supply, new research has indicated.
According to LSL Property Services, the average rent being charged by landlords in England and Wales increased by 0.4% during March, rising to £687. And as we move into the summer of 2011, average rental prices are 4.2% more expensive than they this time in 2010.
Experts claim strong demand in the sector is driving the increase, as the high deposits being demanded by lenders are halting first time buyers’ aspirations and forcing man rent for longer than they would previously have done.
However, aside from struggling tenants, continuing issues in the mortgage market are also preventing many landlords from expanding their property portfolios to meet the increased demand.
"Landlords are seeing demand for their properties go from strength to strength. Although more high loan to value products are coming onto the market, there is still not much money at that level, and first-time buyers simply can't afford the average £25,000 deposit lenders require without substantial aid from parents,” said David Newnes of LSL Property Services
"The growing demand continues to outstrip supply, and this is pushing rents upwards beyond the rate of inflation and well above wage rises."
If the current trend continues, and more isn’t done to alleviate problems within the rental market, experts claim that the average home will cost £715 to rent within 12 months’ time.
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