Rents rise to 41pc of earnings
National rents showed no sign of slowdown in October, up 1% month-on-month and 11% annually to £785 per month.
This is according to research from lettings group Sequence which found that the average rent accounted for 41% of the monthly national average wage (£1,937).
London was slightly higher with rents standing at £1,484, up 2% month-on-month and 9% on last October – 44% of the average London wage (£3,338.50).
Supply of new rental property dropped 4% month-on-month nationally but a record 11% month-on-month in London where demand rose by 2%.
Commenting, Stephen Nation, head of lettings, said: “We have seen an unprecedented rise in rents over the past month, with tenants now giving up 41% of their monthly pay packet in rent.
“The fast tracked introduction of Help to Buy has done nothing to dampen the strength and rate of growth of the rental market (rents up 11% annually), and with the number of properties available to rent still falling short of demand, rents will only continue to rise.
“In spite of a 55% increase in Buy-to-let mortgage applications, prospective investors are facing stiff competition for property from private buyers and are often unable to secure their investment property.
“Across the board whether it is in the sales or rental market there is a universal need for more properties. Competition for houses will continue to impact on affordability and squeeze household budgets across the country for the foreseeable future.”
Article courtesy of Mortgage Introducer
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