Tenants have been hard-pressed in recent years due to an inability to get on the housing ladder and the ever-increasing cost of rents. And things aren't likely to get better any time soon: latest data has revealed that rents in July soared to record levels, with renters across England & Wales forking out more money for their homes than ever before.
According to the latest Buy-to-Let Index from Reeds Rains and Your Move, rents in England & Wales rocketed to an average of £804 per month in July thanks to the fastest month-on-month price increase seen since 2009.
Rents rose by a record-breaking 1.9% from June's average of £789, with four of the 10 regions in England & Wales witnessing record peaks. London and the South East led the way in terms of month-on-month growth (+3.3%), but surprise surges also came from the North West (+1.4%) and the North East (+1.3%), which suggests that the north is finally starting to share the momentum of the rental market in the south.
Annual records were also shattered, with rents in July posting an increase of 6.8% from July 2014 – the highest year-on-year increase on record.
However, despite these significant rises, the news isn't all bad for renters. Indeed, the index also found that the percentage of tenant arrears declined from June, with arrears making up just 8.4% of all rent payable in July 2015, down from 8.7% previously.
But why are rents rising, and why are they growing so dramatically? Well, there are a number of factors at play here, as Adrian Gill of Reed Rains and Your Move explains: "These rent rises are a reflection of heavier wage packets being fed back into the economy now that the rust from the recession has been cleaned off the cogs.
"[However, we are also] faced with a real problem – homes have become a scarce commodity. As house prices and mortgage deposits continue to eat up a larger and larger proportion of wages, appetite for rental properties has begun to outstrip the available stock. This has driven rents up even faster than house prices."
If you're a renter who wants to escape future price hikes, it's time to start saving. A savings account is the best place to build up a deposit as you can then benefit from the interest earned on it: a regular savings account can be ideal as it will encourage you to save some money every month. It also won't interfere if you have your heart set on the forthcoming Help to Buy ISA (H2B ISA).
These ISAs are a Government initiative that is due to be launched in December. You will be able to save up to £200 a month into an account, and the Government will then add 25% on top (up to a total of £3,000). However, you can't pay into a H2B ISA if you are already paying into another ISA this tax year, so if you want to save in the meantime, opt for a non-ISA account instead. You can check out our best buys for more ideas.
Once you have your deposit saved up, it's time to find the perfect mortgage. We've gathered together the best Help to Buy mortgage offers and the best first-time buyer deals, so why not take a look?
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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