More rental properties on market but rents still rising

Opinions are divided as to whether a glut in the number of available rental properties may be building, as the sales market puts in a recovery.

According to Experian, the number of properties listed as being To Let between April and June this year was up 11.4% on the same period last year.

But Countrywide said that there is such a shortage of properties in relation to demand that it has four to five tenants for each rental home it markets.

In London, Experian says there was a 26% rise in the number of available rental properties.

Wales and the East of England were the only areas in the UK with falls in the number of properties listed for rent – down 0.08% and 3.2% respectively.

Experian’s research comes as the Council of Mortgage Lenders shows more mortgage lending to first-time buyers than at any time since 2007, while the Government has announced that 10,000 new-build homes have been reserved under the Help to Buy scheme.

However, rents are continuing to rise to new records, according to tenancy referencing firm HomeLet. Countrywide Residential Lettings reports a similar trend and gives even higher average rents.

HomeLet says the overall average cost of renting a home in the UK was up 1.8% in July compared with June to £826, up 3.6% on a year earlier.

The average London rent is now almost £1,300 a month, although rents in the south-east outside London have fallen to £841, down from £851 last year.

Countrywide says rents rose 1.4% in July to £866 per month, despite falls across the whole of London. It puts average London rents at £1,113.

Nick Dunning, group commercial director at Countrywide, said: “Countrywide’s Monthly Lettings Index reveals that the cost of renting continues to be higher in relation to the cost of monthly mortgage payments, with the average monthly rent now £866 pcm.

“According to recent data from the Council of Mortgage Lenders, lending to buy-to-let landlords is now at its highest level for nearly five years.

“However, despite more competitive buy-to-let mortgages encouraging investors to expand their lettings portfolios and increase the supply of rental accommodation on the market, we have on average four to five tenants for every rental property we are marketing.”

He said rents would continue to rise until demand and supply evened out.