03 Aug Private rental prices in the UK up 2.5% year on year
Private rental prices paid by tenants in Britain increased by 2.5% in the 12 months to June 2015, according to the latest data from the Office of National Statistics.
There were regional variations and a breakdown of the figures shows that rental prices grew by 2.5% in England, 2.1% in Scotland and 0.8% in Wales.
Rental prices increased in all the English regions over the year to June 2015, with rental prices increasing the most in London at 3.8%, followed by the East at 2.6% and the South East at 2.5%.
Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3.0% year on year. Excluding London, England showed an increase of 1.7% for the same period.
It is the biggest annual increase in average rents since January 2013 and according to Steve Bolton, founder of Platinum Property Partners, it is due to a shortage of suitable properties, coupled with strong consumer demand.
He explained that demand for rental properties is coming from people priced out of the housing market and those who find renting better suits their lifestyle and this has set rental prices on an upwards trajectory.
‘This rise in rents isn’t likely to slow down any time soon, particularly as landlords now face a number of increasing costs. The prospect of an interest rate rise, together with the cap on mortgage interest tax relief introduced in the Budget, could pressure some landlords to increase their rents as they look to regain some of their profits,’ said Bolton.
‘While growing wage packets mean some tenants will be able to cope with higher rents, landlords should be focussing on revisiting their strategy rather than passing their costs directly on to tenants,’ he pointed out.