The latest Homelet figures for the UK rental market in December. One thing we can all agree on is the fact that the UK rental market is continuing to grow. According to the Homelet index UK rents were up 4.7% on the year in December and up 1.1% on the previous month with renters now paying an average £782 per month. However, taking Greater London out of the equation rents grew by just 1.7% during the course of the year to £654 per month.
Looking at London on its own the index recorded a 6.9% year over year growth in rents in the capital, where people now pay an average of £1,212 for the privilege of having a rental property. This is compared to the average of £523 in the north east.
Ian Frazer Homelet director said of the report: "At this time of year, we normally see a dip in average rents. This is following the summer months when prices are inflated by the annual influx in higher yield properties being rented to students.
"This year, we've seen this trend buck though after the average cost of renting a home increased by 1.1% to £782 a month from November to December – which is also 4.7% higher than the same time last year. In contrast, the average income of tenants has decreased – albeit a small amount by 0.3% – over the past year. This is a very worrying trend for tenants who have seen their average income increase below the rate of inflation.
"Yes, the private rented sector is booming in many areas at the moment, with more people than ever now renting a home, rather than purchasing their own. However, this is not always due to want of choice. Mortgages are still out of reach for many, and so often, people have no other option but to rent.
"The increase in number of tenants, compared with the dwindling supply of rental properties in many areas – particularly in the Capital – means landlords are able to reap the highest possible yield from their rental investments. The Government has pledged to ease this situation by offering funding and introducing schemes to aid the development of new homes – specifically for private rent.
"Until then, it appears rents will continue to increase and those who want to rent in desirable locations, due to employment for example, may never be able to afford to purchase a home in the same areas."
- Friday 01 February 2013