Rental costs increased in March for the second month in row, as the heavy demand for properties
surpassed the availability of places rent.
The survey, by letting agency LSL Property Services, showed that the average monthly rent being
charged by landlords in England and Wales was £687 – marking an increase of 0.4 per cent from the
previous month.
The most recent increase places the average rent 4.2 per cent higher than the same time last year,
and at the highest level since last November, when rental prices peaked prior to a marked drop over
the festive period – traditionally a quieter time for both property rental and purchase.
The rise since the beginning of the year reflects a gradual upward trend in rent prices since the
financial crisis, which left many mortgage lenders demanding higher deposits and tightening their
mortgage underwriting, making it more difficult for many people to move onto the property ladder.
Similar mortgage restrictions have made it difficult for many potential property investors and
landlords to expand their property ownership, leading to a greater gap between supply and demand
for rented accommodation.
David Newnes, estate agency managing director at LSL Property Services, said: “Landlords are
seeing demand for their properties go from strength to strength. Although more high loan to value
products are coming onto the market, there is still not much money at that level, and first-time
buyers simply can’t afford the average £25,000 deposit lenders require without substantial aid from
parents.”
He added: “The growing demand continues to outstrip supply, and this is pushing rents upwards
beyond the rate of inflation and well above wage rises.”
The company also said that if rental prices were to continue to rise at the current rate, the average
monthly rent this time next year could be £715 – and in London could reach as high as £1,050.
There were strong regional variations, however, and in March rents actually fell in four of the
survey’s ten geographical regions across England and Wales. The East and South East saw the
largest rent hikes, with 2.2 per cent and 1.7 per cent, respectively.
