Tenants are spending more than ever before to rent property in England and Wales, according to a new survey from LSL Property Services. Rents across the UK rose by 2.1 per cent in September compared to the same period twelve months earlier.
Certain areas of the country have experienced greater rent increase than others. The south east of England saw the largest increase in recent months, with monthly rates increasing 3.3 per cent in August alone.
Analysts believe that the increase in prices can be attributed to a surge in the level of demand for rental properties in major cities. An increasing number of people are choosing to rent property instead of purchasing their own first home.
Despite the increase in renters, mortgage lenders have reported strong results in recent months. Real estate experts believe that the dual increase – a surge in the level of demand for rental properties and purchases of new homes – shows that there is a significant shortage of supply going on in Britain.
The government has tried to tackle housing problems in the last year, introducing a variety of new schemes to make property more affordable for first-time buyers. The Help to Buy scheme is one of several measures to make property more affordable.
Some analysts, however, believe that the government’s involvement in the property market could cause a pricing bubble, with excessive support for buyers pushing the price of property upwards. UK house prices are already at their highest level in the last two years, according to recent government statistics.
London has been particularly affected by the surge in housing prices, with a large number of first-time buyers complaining of unaffordable property. Experts claim that the high pricing could lead to a ‘generation of renters’ that are unable to buy property until late in their careers.
