With prices jumps in the east of England leading the charge, last year saw the biggest increase in rental costs since 2011, according to these latest figures from both estate agents ‘ buy-let index.
Several letting agents, particularly in London, found that the increase in rental costs for tenants housed last year outdid any increases in wages throughout the year.
The average cost for rent in England and Wales did drop over the last quarter of the year, from a peak of £816 a month in August, to settle at £794 a month in December.
Despite this drop, the number of tenants in rent arrears went up in December to settle at 9.3%, show the difficulties people are facing in keeping up with rising prices. The number of people in arrears often increases in December as household expenditure rises over the festive period. This is backed up by Your Move who spoke of “temporary spike s in rent arrears” being common at the end of the year, with the same thing happening in 2014 when the proportion rose to 8.9% in December.
The fact that this year ‘s figure is only 0.4% higher, despite rent costs going up by more than seven times that number is something of a positive sign.
Your Move/Reeds Rain ‘s director, Adrian Gill, said of the overall rise: “such growth in rents is a mixed bag. The fact that the majority of tenants can afford higher rents is certainly good news, and should be seen as a positive indicator.
“Yet over the long term,” he went on, “higher rents also raise a serious challenge for the future affordability of housing in this country.”
He added: “Everything else will need to keep up.”
The highest average rent is in Central London which sits far above the national average at £1,251, following an annual increase of 6.3%. Signs are showing though, that the rest of the country is catching up with the capital, with prices in the east of England jumping by 7.8% to reach new highs of £831.
Even in Yorkshire and the West Midlands, prices reached record highs, though remaining far below London at £556 and £593 respectively. This was following a 1.5% increase in Yorkshire and the Humber, and a 6% increase in the West Midlands.
The number of people renting in England is now at around 11 million and growing.
In the capital, the number of people at the top of the market now choosing to rent property rather than buy it has been increasing, following last years boost to stamp duty on prime properties.
This added demand stretching the supply is partly responsible for the hike in prices.
With so many people now having to make use of the letting sector, Shelter ‘s Campbell Robb argues that more needs to be done to make sure that they are given the security they need.
“The only way to give hope back to struggling private renters,” he said, “is for the government to commit to building genuinely affordable homes that people on low to middle incomes can afford to rent or buy.”
Also in the spotlight at the moment is the issue of the all-too-often poor treatment that tenants get from landlords, whether is be due to poorly maintained buildings, or from criminal activity from the landlords themselves when interacting with their tenants.
The government has generated a fund of around £5 million to tackle malpractise, but tenants and landlords alike have argued that this is insufficient.
Further, the recent shutdown of the proposed clause to the new Housing Bill that would see the maintenance of a rented property as “fit for human habitation” as a legal obligation of the landlord has drawn widespread criticism.