Rent prices rise at the fastest rate for a year

The cost of renting a property has risen at its fastest rate for a year, according to the latest research.

Tenants are now paying £731 a month, which is a 1.2% increase from July to August, the LSL Property Services have reported.

The cost of renting rose quickest in Wales and the southeast of England last month.

Tenant arrears have increased for the first time since April, with 10.7% of all UK rent unpaid or late by the end of August.

Many are struggling to cope with the rising cost of renting as unpaid or late rent was up from 9% in July.

Despite annual house prices falling by 2.2% for August, many are still finding it difficult to get onto the housing market.

ìBut first timers with less money canít get a mortgage easily and thatís obviously a major hurdle to getting a foot on the property ladder,î said David Newnes, director of LSL Property Services.

Newly built flats in 2007 appear to be more popular than detached homes as many canít afford the larger deposit.

London is the only region in England and Wales where prices on an annual basis have remained positive and showed signs of a rise.

ìThe UK housing market is now not only fragmented by region, but also by property type, with owners of larger detached property holding much more equity since the credit crisis than those of more modest homes,î continued Mr. Newnes.

ìRecent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers.î

Getting a Mortgage

First time buyers now have to save huge deposits to get close to owning a property and getting a mortgage. Home ownership levels have fallen dramatically over the last year, and experts fear that there could be a return to the mid-eighties where ownership was at its lowest level.

Getting a mortgage can be difficult and frustrating with such a volatile market.
The average deposit has doubled in four years to £26,346 and as rent is set to increase by almost 20% in the next five years, saving for a deposit is now harder than ever.

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