Rents Rise Again As Home Costs Swallow Income
Rental bills are rising above the rate of inflation again after a break of more than a year- as a separate study warns over the impact on families of higher housing costs.
According to LSL Property Services, which runs the Reeds Rains and Your Move chains, the average monthly rent across England and Wales increased by 2% in the 12 months to July as the market picked up with students starting to book accommodation.
That took the pace higher than the 1.9% rate of inflation for the first time since June last year - with the average rent now standing at £753 per calendar month.
London and the South East regions led the way in terms of the highest values - with a £1,143 average in the capital - though London's rate of increase stood at 2.3% over the 12-month period, compared to 3% in the North West.
The North East was the only region where rents had fallen over the period, LSL said, with a 3.8% reduction to reach £507 typically.
Its report was released as another study warned that almost 1.6 million UK households were now seeing more than half their disposable income being taken up with rent or mortgage costs.
The Resolution Foundation think-tank, which carried out the research, said "pinched" households were more likely to rent privately, be young, live alone, live in one bedroom properties, have recently moved and live in London.
Its analyst, Laura Gardiner, said: "The majority of the housing-pinched are in work but on low and middle incomes, leaving little left over after housing costs to spend on other essentials.
"With house prices and rents rising in some parts of the country, interest rates expected to start to go up and income growth remaining weak, we should be concerned about the ability of this group to absorb additional pressure on their household budgets from higher mortgage payments and rents.
"It is vital that more money is invested in the supply of new housing in order to drive down costs, otherwise we can expect to see a steady rise in the number of households that are 'housing pinched' over the coming years."