Rents in the UK have risen for a third consecutive month, with London tenants paying record prices
LONDON’S tenants are facing continued misery, with the Olympics helping to push up rents to record highs.
Figures from property group LSL showed a third successive monthly rise in monthly rents across the UK, hitting new record highs in London. The average rent in the capital rose 0.9pc month on month, hitting an average of £1,047.
David Newnes from LSL, said that “tenants moving with urgency to secure properties ahead of the disruption of the Olympics” have pushed up prices. Some landlords have also terminated contracts for their tenants in order to rent out the properties on a lucrative short term basis.
“The sheer weight of tenant demand continues to push up rents across the country. Lending criteria remains tight and the number of mortgages given to first-time buyers – especially those without substantial deposits – is still a long way from the level seen before the credit crunch,” Mr Newnes said. “With higher rents and the growing cost of living eroding how much tenants can save towards the large deposits required to buy, it’s no surprise to see the private rented sector swelling by 262,000 households a year.”
LSL figures showed that in June, the average rent in England and Wales rose by 0.9pc to £718 per month, just shy of the record high of £720 per month in October 2011. As a result of the monthly rise, the pace of annual rental inflation also increased, climbing to 2.4pc from 2.3pc in May.
It is hoped that the Government’s new Funding for Lending scheme will help first-time buyers who cannot raise large deposits to get out of rented accommodation and onto the property ladder. It may also reduce rents by providing better value buy-to-let mortgages.
High rents are making it hard for these people to save for large deposits. However, since the Government scheme was launched there have been a number of new products launched at higher loan-to-value ratios, including Royal Bank of Scotland’s new 4.79pc five year fixed rate.