Rents hit another record high in June, smashing the £700 per month barrier for the first time, says a new report from LSL.
It has set alarm bells ringing among housing campaigners, who are already concerned about caps to housing benefit.
One called today’s rents ‘extortionate’ and called for rent controls.
Eileen Short, who chairs Defend Council Housing, a group opposed to the privatisation of council housing, said a ‘dire situation’ had been created, and she warned of a looming housing crisis.
She said: “The bottom line is you need two things – you need to cap and regulate high rent and build affordable housing for rent.
“The rest is a recipe for landlords to make a lot of money, and a lot of human suffering and despair.”
The latest Buy-to-Let Index from LSL, parent company of national chains Your Move and Reeds Rains, says that in June, the average asking price rent in England and Wales rose by 0.7% to £701 per month, surpassing the previous high of £696 in May.
With an annual inflation of 4.1%, the average rent is now £28 per month higher than June 2010. As a result of dipping house prices and increasing rents, the average yield reached 5.2% in June, up from 5.1% in May.
Over the course of the last year, London’s rents have climbed faster than any other region of England and Wales. In June, rents broke through the £1,000 per month barrier for the first time, reaching a new high of £1,006 per month – an annual increase of 6.9%.
The next biggest rises were in the North-East and the West Midlands where rents increased by 5.1% and 4.6% respectively. In the last year, average rents have only fallen in the East of England, where they fell by 0.3%, compared to an annual fall of 1.2% in May.
On a monthly basis, rents increased the fastest in the West Midlands and the East of England, rising by 2% and 1.6% respectively compared to May. Rents declined in three regions – the East Midlands, where they fell by 0.5%, the South-East and Yorkshire & The Humber, where rents fell by 0.2% and 0.1% respectively.
David Brown, commercial director of LSL Property Services, said: “Tenant demand continues to reach ever-higher peaks, and there simply isn’t enough rental property coming on to the market to match it.
“In areas like London where competition for rental property is most intense, it’s not unheard of for rental properties to be let within a day of coming on to the market. We’ve had five successive months of rent rises, but there is no sign of a let-up any time soon.”
The LSL research was based on around 18,000 properties.
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Comments
renting has become extremly expensive et agency fees are following making you pay £60 pounds for tenancy agreement, £150 agency fees, £120 for references, it is a very known agency who practice that. They are going to fare.
That's why British people go to France, Portugal to rent and buy properties to settle down.
Landlords and agencies offer non livable properties for incredible prices, have a look in London or Luton. The prices are overestimed, many agencies don't see the property and give a price by chance. I was really chocked by that none professional way to work. Many things to say but not enough place. Cheers
Supply and demand is not greed-suggest tenants save up like Landlords and get a deposit together. It's time to start building.
@ S A Longden
These so called 'Campaigners' need to get a mortgage and buy a house in London and then see if they will not want to make a profit by charging what they claim to be 'extortionate rents'.
High London purchase prices = High London rental prices. Simple. All the bleating about it is not going to change anything.
Supply and demand is applicable to every aspect of the commercial driven society we live in. This may come as a surprise to some people, but...Private Landlords do this for commercial reasons. They are not charitable organisations.
Otherwise they would be like just a housing trust or Local Council. Oh..sorry...., my mistake, housing trusts and councils sell all their property to private investors and do not re-invest in new housing.
Therefore it would seem that Private Landlords are doing more for housing than you would think.
Rent rise due to a lack of supply. Currently there are far fewer buy-to-let mortgages available, and this is constricting supply, along with a belief that values may fall. This is what is driving up rents.
Eileen Short, and the previous commentator clearly don't remember the disastrous consequences of the last time the UK implemented rent control (the Rent Act 1977): rent control lowered yields in comparison with other investments, so landlords simply sold their residential property, and put the money elsewhere (i.e. stocks, commercial property, overseas investments where regulation didn't exist) to generate a better return. As a consequence tenants found themselves worse off - instead of facing high rents, they instead had an extreme shortage of available accommodation. The public sector is currently proving incapable of housing all those that it currently serves, without having to absorb an additional burden from the private sector.
Just as I said previously on another thread, why do rents go up merely due to demand? It is plain greed and unscrupulous. Rent should be a landlord's costs in having the property plus a reasonable return, not oodles of cash because people are desperate for a home of their own. WWJD?