The cost of renting a property is on the rise in England and Wales, results from a survey by LSL Property Services have shown. According to the survey the average cost of renting is now £705.00 per month, an increase of 0.6% from the previous month. This is the sixth consecutive month that rent has increased and the current figures show a £29.00 per month rise compared to last year.
London it seems is experiencing the biggest rises with average monthly rent now £1,009- 7.1% higher than this time last year.
The massive rise in cost is due to the very high demand which is allowing landlords to keep increasing their demands. Fewer people are buying homes and more young adults are putting deposits down on rental properties instead of mortgages. Of course, as the rents are increasing so are the deposits, leading to many individuals reliant on financial help from their parents and starting them off on a vicious cycle.
With mortgage lender left cautious after the recession, first time buyers are finding it increasingly difficult to successfully apply for a mortgage loan, leading many to turn to rental properties. Thus, the demand increases as does the rent cost which consequently makes it continually difficult to save up a significant deposit for a mortgage.
It doesn’t look like things will get easier any time soon either with many economists predicting a fall in house prices this year only to be followed by a very quick, very large increase over the next few years. It is believed that this booming rise will be the result of a shortage of homes which will begin another supply and demand cycle. The shortage of homes is due to an uneven ratio between the number of houses being built and the increasing population and demand for smaller houses.
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MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.