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Average rent soars through £700 a month barrier

Average rent soars through £700 a month barrier

Category: Money

Updated: 15/07/2011
First Published: 15/07/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The seemingly unstoppable rise in rental prices continued in June, with average monthly prices surging past the £700 barrier.

The average price of renting in England and Wales jumped from the previous high of £696 in May to £701 last month, meaning that the price has risen by 4.1% in the last 12 months – a rise of £28.

Unsurprisingly, the figures from LSL Property Services show that London's rents have climbed faster than any other region of England and Wales .

In June, rents broke through the £1,000 per month barrier for the first time in the capital, reaching a new high of £1,006 per month – an annual increase of 6.9%.

The next biggest rises were in the North East and the West Midlands where rents increased by 5.1% and 4.6% respectively.

In the last year, average rents have only fallen in the East of England, where they fell by 0.3%, compared to an annual fall of 1.2% in May.

The figures are reflective of a market where demand is far outstripping supply, with properties in popular areas being snapped up within 24 hours of becoming available.

Figures out earlier this week from the Association of Residential Letting Agents revealed that agents have seen a high rise in demand which is simply not being matched by supply.

And David Newnes, estate agency managing director of LSL Property Services, has warned that the trend of rising prices shows no signs of ending.

"We've had five successive months of rent rises, but there is no sign of a let-up anytime soon," he said.

"Despite several new deals on the market, securing a big enough mortgage remains a tall order for the average buyer. The climbing cost of living and renting is impacting how much renters can save for their deposit, and demand will remain high in short-term.

"In the long-term, there is an even smaller chance of a significant slowdown. Just 102,570 new homes were completed last year – at a time when the UK 's population increased by nearly half a million. This trend shows no signs of slowing.

"Excess demand will be driven into the private rental sector driving rents up further."

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