Average cost of renting a home in the UK reaches all-time high

The average cost of renting a home in the UK increased by 3% during June to £811 per month

Related topics:  Landlords
Warren Lewis
15th July 2013
Landlords
Tenants in Greater London are paying 3% more than last month, and an additional 4.9% than in June 2012

When the Greater London figure is removed, the average monthly cost of renting a home around the rest of the UK is £681. This is the highest amount since August 2012

It is now 86.5% more expensive to rent a home in the Capital than the rest of the UK

There’s been two consecutive annual decreases in the percentage of tenants aged 36-45 moving into a new rented property who previously owned their own home (6.1% from June 2011 to 2012, and 8.8% from June 2012 to 2013)

Andy Richards, Business Development Director at Homelet says:

"The average cost of renting a home in the UK has not only increased once again, but also reached the highest amount recorded. At £811 per month, tenants are now paying more than ever after the average rental amount rose by 3% during June. This month’s average figure is also 5.1% higher than the same time last year.

When the Greater London figure is removed, the average cost of renting a home in the UK is £681 per month, which is an increase of 1.9% from May 2013 – and the highest amount since August 2012 (when the figure was £697 per month).

"The increases in average rental amounts appear to be consistent across the UK, with eight of the 12 regions seeing the cost of renting a home rise during June. Wales, the West Midlands and Northern Ireland saw minimal decreases in rental amounts, with the North East seeing the largest monthly drop in average rents of 9.4%.

He continues:

"The private rented sector has once again been the topic of much discussion recently, particularly around letting agents’ fees and increasing rents. During this time of year, we do generally see an increase in the number of people renting a new home – particularly students who move into higher yield properties – which therefore pushes average rents up.

"Although the increase in rental amounts shows how the private rented sector is still in demand, it also needs to be remembered that tenant income isn’t increasing at the same rate. This month’s data shows the average amount a tenant in the UK earns increased by just 0.8% to £28,000 per annum.

"Yes, rents are going to increase naturally – however, costs are rising at a rate much faster than both inflation and tenant income. With recent reports of increased tenant rent arrears, it appears that maybe those renting a property just cannot afford spiralling living costs.

"I believe increased mortgage availability and confidence in the buy-to-let market could lead to a rise in the supply of rented homes to potential tenants. This could then help to slow the rate of rising rents, which would stabilise the market.

Andy comments:

"The Government recognises the need to address the private rented sector, not only to regulate rental amounts, but also ensure a consistent standard across all properties. The London Rental Standard is an example of this that is set to be introduced this year, which includes the plans to accredit 100,000 landlords by 2016.

"Although the property market appears to be recovering - with the Halifax recently reporting house prices seeing their strongest annual increase for more than two years in May - the ability to become a home owner will still be a long-term plan for many. As a result, the private rented sector will continue to grow – however, it’s important to make sure rents are set at levels affordable for tenants so rent arrears do not continue to rise.
More like this
Latest from Financial Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.