EU immigrants cause largest rise in UK rents

The influx of immigrants from EU accession countries has led to the largest rise in UK rents in at least eight years, a survey showed today.

In the three months to the end of July, 30 per cent more surveyors reported a rise in rents than a fall, up from 20 per cent in April, according to the Royal Institution of Chartered Surveyors' (RICS) latest lettings report.

That was the strongest rise in the history of the study, which dates back to 1998, and four times the long-run average.

Some 28 per cent more surveyors reported a rise in rents for flats than a drop, compared to 21 per cent in April and a long-run average of seven per cent.

Rental levels for houses was even higher, with 34 per cent more surveyors reporting an increase than a decrease, compared to 18 per cent in the previous quarter, and a long-run average of seven per cent.

"Rental levels achieved are edging ever closer to asking prices," Richard Cotton, of Cluttons in London, said. "Stock levels are still very low compared with demand."

Terry Kimmitt, of Interlet Lettings Agents, said the market had been "surprisingly active" for the summer months.

"Rents are going up and quality accommodation commands a premium," he added.

The government said this month more than 400,000 east European workers had been allowed to work in Britain since their home countries joined the EU in 2004.

The report said that this had boosted demand and exerted upward pressure on rents.

RICS spokesman Jeremy Leaf said: "Economic prosperity and population migration have increased rental demand pushing up rents, making conditions better for property investors.

"However, first-time buyers will find it hard to enter the housing market with higher rents making it difficult to save sufficient sums for a deposit."

The average UK rent was £787 per month in January. Excluding London - which commands the highest monthly rent of £1,804 - the average was £566.

Surveyors were confident the upward trend would be sustained in the next quarter: 28 per cent more surveyors reported confidence in rental increases compared to 24 per cent in the previous quarter.