24/08/2011
According to the latest results, rents across England and Wales rose by record amounts in some areas, with properties becoming more expensive to lease, for the sixth consecutive month.
The survey results, released by LSL Property Services, suggest that the average cost of renting a property hit £705 in July – a further increase of 0.6% on the month before.
London was unsurprisingly the area where rental properties rose by the most, with the cost of renting now 7.1% higher than 12 months ago, with the current cost £1009 per month.
Despite the hike in prices, industry experts do not expect to see any let up in the costs as demand for rental property is pushing the cost upwards, with many places not able to keep up with the needs of tenants in the area.
The demand for tenancies is at record highs right now due to the combination of factors in the economy. Banks are still operating a tight lending policy with many insisting on large deposits, especially for first time buyers, whilst the lack of stability in the employment market is making many people more cagey about taking on large debts.
However, the increase in the cost of renting a home is not the only cost which has continued to rise – the average deposit needed has also shot up and many potential tenants are being forced to borrow money to pay the landlord.
The Centre for Economics and Business Research said house prices are likely to continue to drop in the short term but start to rise during 2012 and by 2015, will be shooting up by 4%. However, just 110,000 new homes are expected to be constructed – far less than the 225,000 which is estimated are required to keep pace with the increasing population needs.
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