In the UK private rented sector, the average rent for a residential property now stands at a staggering £777 (GBP) per month across the whole of the country but there are some regional differences.
Private sector rents in Greater London rose by 6.7% during the last 12 months to reach a regional average of £1,224 (GBP) per calendar month (pcm).
In stark contrast, PRS tenants in the North-East living in similar sized properties are paying an average rent of just £512 (GBP) pcm.
Greater London and its surrounding areas have seen a greater annual increase in average residential property rents than anywhere else in the UK, however average personal income has failed to increase in line with the 2.7% increase in inflation, never mind the rent increases, only growing by a paltry 0.8%, increasing the risk of rent default.
Tenants living in regions with the largest rent increases are now struggling more than ever to make their finances go further, with some even looking to relocate to cheaper regions in order to be able to afford the rent and maintain the same quality of life.
In order to avoid overstretching tenant finances and running the risk of tenant rent default, landlords are advised to utilise Rent Guarantee Insurance to give themselves and their tenants a little peace of mind, should the tenants financial circumstances change.
Sim Sekhon, spokesman for the UK’s leading landlord services provider, Legal 4 Landlords, said: “Rental prices follow a trend, increasing towards the summer months and when combined with a dwindling supply of properties within the UK private rented sector, tenants could face greater rent increases than normal this year. The new bedroom tax introduction by the Government could impact on PRS demand too, as welfare reforms mean that tenants face housing benefits cuts due to the number of spare bedrooms they may have. This is expected to see a major shift in tenancies away from social housing into the private rented sector, which brings more problems for landlords without specialist insurance in place to guarantee the rental income”.
The expected increase in PRS demand could drive rental prices even higher, affecting the finances of many more struggling tenants and increasing the likelyhood of rent default.
It is becoming vital that the construction of affordable new residential properties, both for rental and private purchase, is stepped up to offer much needed housing stock in order to meet the ever growing tenant demand.
- Click to share on Facebook (Opens in new window)
- Click to share on Twitter (Opens in new window)
- Click to share on Google+ (Opens in new window)
- Click to share on Tumblr (Opens in new window)
- Click to email this to a friend (Opens in new window)
- Click to share on Reddit (Opens in new window)
- Click to share on Pocket (Opens in new window)
- Click to print (Opens in new window)
- Click to share on Pinterest (Opens in new window)