Pace of rent rises quickens as average UK rent reaches £937 a month

Pace of rent rises quickens as average UK rent reaches £937 a month

Rents were up 4.6% in July on the year before, figures show, with median rent for one-bedroom flat in London now more than £1,000 a month

Sarah Butler

@whatbutlersaw

Monday 24 August 2015 00.01 BST / http://www.theguardian.com/money/2015/aug/24/rent-increases-uk-london-housing

Average rents in the UK reached £937 per month in July as the pace of increases took a significant step up amid a shortage in the supply of housing.

Rents were up 4.6% on a year before, compared with a 3.8% rise in June, according to research by Countrywide, the UK’s largest property services company.

Central London saw by far the biggest increase in the cost of newly rented properties at 6.8%, but there were also strong rises in Scotland (4.5%) and the east of England (4.3%).

It now costs an average £2,583 a month to take on a rented property in central London, compared with £663 in the north of England, the cheapest place to rent in the UK, according to Countrywide, which analysed more than 75,000 properties in England, Scotland and Wales.

London has become one of the most expensive cities in the world to rent a home, prompting politicians to call for New York-style controls on landlords.

In 18 of London’s 33 boroughs, the median rent for a one-bedroom flat is more than £1,000 a month, according to statistics from the government agency that values properties for the purposes of council tax in England and Wales.

The Valuation Office Agency figures show rents for a one-bedroom flat in Greenwich, south-east London, have risen by 30% over five years, from £750 a month to £975. In Islington, north London, a one-bedroom flat has gone up by 20% over the same period, from £1,213 to £1,452.

The soaring cost of buying a home has seen a boom in the private rented sector in recent years. There are 1.4m more rented homes today than in 2008, according to data from the English Housing Survey.

While the growth of the sector has reduced the upward pressure on rents in some areas, it has also encouraged landlords to hold on to their properties for longer, further restricting supply in the housing market. Countrywide estimates that an additional 100,000 property sales may have taken place if the private rented sector had not grown since 2008.

Earlier this month, the Royal Institution of Chartered Surveyors (Rics) confirmed that the number of properties coming on to the market has fallen for six months in a row, while the number of new buyer inquiries has been increasing for four months. New listings were down in nine out of 12 regions across the UK, with surveyors in East Anglia reporting the sharpest fall.

The imbalance between supply and demand prompted surveyors to forecast sizeable house price and rental rises over the next 12 months