UK rents outpacing house price growth but are below the cost of living
UK rents are now rising above the rate of house price growth but are just below the UK inflation rate.
Figures from tenant referencing service HomeLet found that new average rents were up 2.1% annually in October to £928 a month.
In comparison, data from the latest Halifax House Price Index showed average growth was at just 1.5%.
Rental growth is, however, still below the inflation rate of 2.4%, suggesting prices are below the cost of living but still higher than the growth in property values.
The biggest increase in rents during October was in Northern Ireland, up 4.5% to £653 per month, while London still has the highest rents, at £1,619 - up 4% annually.
When London is excluded, the average UK rental value was £768 in October, up 1.7% on last year.
Martin Totty, chief executive at HomeLet, said: "Average UK-wide rents continue to increase year-on-year broadly in line with the current rate of inflation and the growth in average wages, meaning affordability in most parts of the country is little changed.
"The exception is London and the south-east, where average rents have increased above both inflation and average wage growth. In contrast to house price trends in this region of the country, activity levels in the private rented sector remain resilient.
"Landlords committed to the sector here seem able to command higher rents, potentially providing some offset to the negative headwinds of taxation changes some will have experienced."
Commenting on the figures, Adam Male, director of lettings at online agent Urban.co.uk, said: "While many are resigned to the rental sector due to the inflated cost of home ownership, the continued escalation of rental costs is, in fact, a second facet of the UK housing crisis.
"An increase in rental prices across 11 out of 12 regions highlights the plight of tenants across the UK and the uphill struggle they face just to put a roof over their head.
"Rather than work with the nation's buy-to-let landlords, who act as the backbone of the UK rentals sector, the Government has introduced numerous legislations to 'level the playing field' between landlord and tenant.
"The reality of this excessive and consistent campaign against the buy-to-let sector has been a reduction in rental properties, an uplift in rogue landlords and unsuitable living conditions and a spike in costs for UK tenants."