Rents paid by private sector tenants in the UK rose by 2.3% during the year to September, which was unchanged from the data recorded in August.
Data from the Office of National Statistics also shows rents are up by 2.5% in England and 0.1% in Wales. However, rents were down by 0.1% in Scotland.
Rental values rose in all English regions during the reporting period. The most prominent growth was recorded in the South East, where rents rose by 3.5% Prices across the whole of the country, with the exception of London, rose by 2.1%.
In fact, investors with landlord insurance on private rental properties have seen rent rises steadily since 2011. Those in England have seen greater increases than those in Wales and Scotland.
Nick Davies, head of residential development at Stirling Ackroyd, noted that there is a lack of properties available to rent in London, where demand is highest. He attributes this to a large number of international students.
Davies explained: ‘While London draws in the some of the world’s brightest students and graduates, it lacks rental homes to accommodate them. With rents already unaffordable for many young people, we are witnessing the rent rises ripple out to the South East as potential tenants are forced to look further afield.’
He feels that the Chancellor Philip Hammond should seriously think about scrapping the stamp duty surcharge for buy-to-let properties in his Autumn Statement in November. This, Davies believes, will encourage more buy-to-let landlords into the market and ultimately make renting more affordable.
Concluding, Davies said: ‘While the 2.7% increase in London rents may not seem severe when compared to the house price rises, it’s important to remember that average weekly earnings are only increasing by 2.3% year on year in nominal terms. And this suggests it will be even harder for first time buyers to save for a deposit.’