Average monthly rents will reach £800 in England and Wales by mid-2015, a UK lettings agency has predicted.
LSL’s projections show that by May 2014, rents will already average £765 per month.
Speaking to the Council of Mortgage Lenders, Lucy Jones said: “Fundamentally, buying a home is still becoming less affordable, not more. Renting was the future before the recession – it cushioned many during – and it’s still the future for millions. By the middle of this decade at least one in five people in the UK will be living in privately rented accommodation.
“At some point in the summer of 2015, rents are set to reach an average of £800 per month. Such levels of demand show the practical importance of this industry – and the importance of the financial mechanisms that make its expansion possible.”
A heat map of rents makes the scale of variation across England and Wales clear. London’s average rent has increased by 18 per cent over the last three years, with the latest increases touching 8 per cent per annum. Meanwhile, rents in the South West haven’t changed at all from their levels at this point in 2010.
Jones added, “As before, there will be serious regional variations. Rents in London are already 109 per cent higher than in the North East. Over the next two years, London will see rents rise by 16 per cent. Meanwhile, the East Midlands will see rises of around 8 per cent – and rents in the South West look likely to pick up by only around 1 per cent by 2015, or less than half a percentage point a year.”
Based on demand since 2010 and expected changes in the housing market, LSL can forecast the trajectory of rents between now and the middle of the decade.
Jones continued: “The sheer scale of variation across the country is always something to behold – partly because that variation is becoming more pronounced. What is clear is that there has been a significant upheaval since 2008 in the rental market. And this has had a very real effect across the whole of England and Wales. But as a whole landlords have kept up with demand – increasing supply by around 10 per cent since 2008.”
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