Average monthly rents in England and Wales will hit the £800 mark by the middle of 2015, according to LSL Property Services.
Speaking to the Council of Mortgage Lenders today (June 19th), operations director Lucy Jones has revealed the estimations of LSL's But-to-Let Index, which predicts that rents will continue to rise over the next two years. By hitting £800 a month, this will be a 21 per cent rise compared to rents recorded in 2010. By May 2014, rents will average £765 nationally every month.
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. Such levels of demand show the practical importance of this industry – and the importance of the financial mechanisms that make its expansion possible.”
Looking geographically, London will see its rents rise by 16 per cent whilst this growth will only be half in the East Midlands at eight per cent. If anything, it will be the south-west of England that benefits greatly in the next few years, with LSL predicting that rates will only increase by one per cent.
Good news for the market is that the number of tenant arrears have been falling in the past four years, according to the LSL research. Progress is set to be slow, but LSL predicts that between 2008 and 2018, the number of rental arrears are predicted to be slashed by half. The rental market is also predicted to stabilise after a tumultuous period after the global financial crisis hit in 2008.
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