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No let up in rent price rises

No let up in rent price rises

Category: Mortgages

Updated: 20/10/2011
First Published: 20/10/2011

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 It is now over 6 months old so the content may be out of date.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 relentless price rises in the rental market show no signs of abating, as more people battle for fewer properties.

Asking prices have increased during every month this year and reached an average of £890 in the UK by the end of September.

It means that rental prices have increased by 4.6% over the past 12 months, according to findaproperty.com.

In the last three months, prices have risen by 1.3%, with the most pronounced rise in London.

Prices increased by 4.9% or £96 on average taking the average rent to over £2,000 (£2,075) per month in the capital. Prices are now 14.1% higher than they were in the same period in 2010.

Outside the capital, the region with the fastest rental asking price growth is Yorkshire and Humberside. Between the second and third quarters of 2011, prices in the region rose by 4.1% to stand at £584 per month.

It is followed by the North West (3.6%) and the West Midlands (1.2%).

By contrast, rental prices decreased in Scotland (-2.3%), Wales (-2.0%) and the East of England (-0.2%) over the same period.

As demand for rental properties has risen, the number of properties available has, unsurprisingly, fallen.

The number of homes for rent dropped by 0.9% between June and September, while the average length of time homes are on the market has fallen by 10% to 45 days – 13 days less than at the same point two years ago.

"Rental prices are continuing to increase at a startling rate, as difficulties remain in the home-buyer segment of the market. Rental prices have now increased every month this year," said Samantha Baden, property analyst at findaproperty.com.

"With the supply of new rental properties coming onto the market slowing, rental prices could continue to rise further in the coming months and the upward pressure on prices is likely to remain into early 2012."

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