Rents resumed their upward march during February as there continued to be too few properties available to meet demand, research indicated last Friday.
The average rent in England and Wales edged ahead by 0.2 per cent to €787 a month, to leave the typical cost of being a tenant 3.9 per cent higher than in February last year, according to letting agency network LSL Property Services.
The group attributed the rise to the ongoing mismatch between supply and demand as the problems in the mortgage market prevented many potential buyers from getting on to the property ladder, forcing them to rent instead.
Landlords are also facing constraints on the amount they can borrow, meaning they cannot expand their portfolios.
David Newnes, estate agency managing director of LSL Property Services, said: “The fierce competition among renters in many areas of the country has cut short the traditional lull we tend to see between December and February.
“The consistently constrained level of lending to homebuyers has bolstered demand – and rents – in the private rental sector during what is typically a slower period.
“Around 158,000 fewer first-time buyers were unable to enter the market in the last 12 months, compared with three years ago.
“With the mortgage market even more sluggish since the start of 2011, this backlog of frustrated buyers has increased even further and rents have risen correspondingly.”
But there continued to be wide regional variations, with Wales seeing the biggest monthly change at 1.9 per cent, followed by the north west at 1.1 per cent, while London has seen the largest annual increase in rents at 7.7 per cent.
However, average rents actually fell in four regions, with the north east reporting a 1.4 per cent slide, and they have remained broadly static during the past year in the north east, north west and east of England.
Tenants’ finances continued to deteriorate during the month, with 12.6 per cent of all rent either unpaid or paid late in February, up from 11 per cent in January.
The group estimates that a total of €341 million of rent was not paid to landlords, significantly higher than arrears of €297million for the previous month.