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Renters warned to expect further price rises

Renters warned to expect further price rises

Category: Money

Updated: 20/08/2010
First Published: 20/08/2010

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 It is now over 6 months old so the content may be out of date.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 cost of renting property in the UK continues to rise, with renters being warned that the trend is unlikely to change any time soon.

Landlords pushed up rents by 0.5% in the month, figures show, the sixth month in succession that prices have increased, according to LSL Property Services.

The average rent in the UK finished the month at £676, which is 2.3% higher than a year ago, and just £12 shy of their peak two years ago.

The good news for landlords continued with figures showing that rental arrears were at their lowest level since figures were first compiled in 2008.

The proportion of rental agreements in arrears fell to just 9.2% in July, down from 11.2% at the turn of the year.

In monetary terms, some £212.9 million of rent was unpaid in July, although this is substantially down on its peak of £361 million in August 2008.

While landlords may raise a glass to these latest figures, renters are unlikely to join the toast.

With inflation remaining stubbornly high and the increase in VAT from 17.5% to 20% looming on the horizon, renters have been told that they can expect further rises.

"We don't expect rents to fall away any time soon." David Brown, commercial director of LSL Property Services, commented

"With inflation well above the Monetary Policy Committee's target, interest rates can only go one way - north.

"When they rise, many landlords will face increased monthly mortgage repayments - and many will try to raise their rents to cover the difference."

If the thought of continuing price rises is too much for you, then you can begin your mortgage search by visiting the Moneyfacts.co.uk Best Buy tables.

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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 Any products featured may be withdrawn by their provider or changed at any time.

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