Rising rents are squeezing tenants in England, Wales

Tenants are facing further pressure on their finances as rents have increased in every region across England and Wales for the first time in 18 months, a lettings network has reported.

London saw the biggest annual increase in rents, with a 7.6% rise

Private rents rose by 0.2 per cent month-on-month in April to reach £736 on average – and for first time since November 2011 rents were up year-on-year across the whole country – according to LSL Property Services, which owns chains Your Move and Reeds Rains.

Rents started edging back up again month-on-month in March, following a period of falls amid the seasonal winter slowdown.

The further push up in April means average rents have returned to levels not seen since November last year and they are 3.9 per cent higher typically than a year ago.

London saw the biggest annual increase in rents, with a 7.6 per cent rise pushing average rents to £1,110 a month. Wales recorded the second highest spike, with a five per cent rise taking rents to £566 typically.

The South West, which was the only region to see rents fall year-on-year in March, recorded a 0.5 per cent annual increase in April, putting average rents at £634.

On a monthly basis, rents rose in eight out of 10 regions, with the East Midlands recording the strongest increase at 0.6 per cent, to reach around £552.

Rents have soared amid strong demand in the sector as would-be buyers have struggled to meet mortgage lenders’ requirements and make the jump onto the property ladder.

There have been some signs of the situation easing following Government schemes to help home buyers, which are filtering through to help people with smaller deposits.

Lenders have reported seeing increased numbers of first-time buyers taking out loans amid better access to mortgages. However, David Newnes, director of LSL Property Services, said that a lack of potential homes to choose from generally is helping to maintain the upward pressure on rents.

He said: “Landlords across the UK have increased the stock of rental properties by around 10 per cent since 2008 – but the more fundamental squeeze is still coming from a lack of new building.”

Mr Newnes said the rent increases will be particularly “keenly felt” in areas with a tough jobs market, as wage growth remains sluggish.

Despite the upward march in rents, a slight improvement in tenants’ arrears was recorded in April. Around 8.4 per cent of rent was late or unpaid, compared with 8.5 per cent in March. Mr Newnes said: “Landlords are lending a hand, and will need to keep taking up slack until the economy is on a more solid footing and improvements filter through to everyday wage levels.”

The study is based on rents achieved on around 18,000 properties across the country.

A Department for Communities and Local Government spokesman said: “Official Valuation Office Agency figures show that median rents were unchanged nationally over the past year and Rightmove (an online real estate portal) is forecasting that two thirds of landlords are planning to freeze their rents in 2013. However, this Government is determined to boost the poor housing supply numbers we inherited.

“In the private rented sector we have a £1 billion Build to Rent fund in place, with up to 45 important schemes already identified.

“This is in addition to guarantees of up to £10 billion to help grow the number of homes in both the privately rented sector and the affordable homes sector.”