21st November 2014
Private rents hit a record high last month, with tenants shelling out an average of £770 a month.
The cost of renting in England and Wales increased to the new high of £770 per month in October from £768 the previous month, according to figures from LSL Property Services, which owns chains Your Move and Reed Rains.
The rise means the average rent is now 1.5% higher year-on-year, ahead of the Consumer Price Index rate of 1.3%.
However, renters will be pleased to know the pace of rents is slowing, which will help ease the burden on tenants’ finances. In October last year, rents had risen at a faster rate of 1.9% year-on-year and in October 2012 rents had increased by a staggering 3.4% over the previous year.
Unfortunately, the slow down in rents is too late for some and 6.9% of rents are in arrears last month. However, this is significantly down from February 2010 when rent arrears hit 14.6%.
‘Recent progress on the unemployment rate has helped bring down the most serious cases of rent arrears,’ said David Newnes, director of Your Move and Reed Rains.
‘But for others consistently falling just a little behind on rent, the trouble is more with incomes that just haven’t kept pace with the cost of living. Looking ahead, if more homes to rent can coincide with a true renewal of real wages, this could provide a powerful combination and would take rent arrears even lower.’
Last week the Joseph Rowntree Foundation warned that private rents could rise 89% by 2040 while house prices will rise 40%. This means poverty rates among renters in England would rise from 43% in 2008 to 53% in 2040.
The LSL data shows the East of England has seen the largest jump in rents in the past year at 4.9%, followed by the East Midlands at 3.6% and then 3.1% in the North West.
London has seen the slowest rate of annual rent increase at just 0.5% but at an average cost of £1,162 per month, rent in the capital is around one and a half time the rest of the country.