Rents 'reach record high'

Posted: 18 Jul 2011 14:08:22 GMT

June saw average rents climb higher than the £700 barrier.

Rents in the UK reached record highs in June, breaking the £700 barrier in the process.

LSL Property Service's Buy-to-Let Index revealed such costs in England and Wales rose by 0.7 per cent in the month, reaching £701.

This was markedly greater than the previous high of £696 - recorded in May - while annual inflation came to 4.1 per cent.

It means the average amount tenants are parting with is currently £28 more than one year earlier, while the average yield escalated to 5.2 per cent.

From a geographical perspective, rents in London increased sharper than elsewhere in Britain, reaching a new high of £1,006 per calendar month.

Other areas to witness significant rises included the north-east and the West Midlands, which saw elevations of 5.1 per cent and 4.6 per cent respectively.

David Newes, estate agency managing director of LSL Property Services, said: "The climbing cost of living and renting is impacting how much renters can save for their deposit and demand will remain high in [the] short-term."

From a month-to-month point of view, the West Midlands and the east of England experienced the quickest rent increases, while such payments declined in the East Midlands, the south-east and Yorkshire and the Humber.

Mr Newes noted there is little chance of a significant slowdown regarding rising rental costs in the long-term, explaining: "Just 102,570 new homes were
completed last year – at a time when the UK's population increased by nearly half a million. This trend shows no signs of slowing."

He added landlords who think in the long-term are likely to prosper, as excess demand coming into the private rental sector should send rents up even higher.

The findings come shortly after the Association of Residential Letting Agents recently released figures showing demand continues to outstrip supply in the UK rental market.
 

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