Rents in the UK have increased by more than 16 per cent in the past five years, the latest Buy to Let Index from Your Move and Reeds Rains has revealed
Figures in the latest index show that rents have grown by 16.3 per cent over a five year period.
The average monthly cost of a rental property in England and Wales stood at £763 in January 2015, which is an increase of £107 from January 2010.
During the last half decade, annual rent increase has averaged three per cent. However, when data is adjusted to take into account inflation, the real term rise stands at 0.6 per cent year on year.
In the most recent month on month findings, rents actually fell by 0.6 per cent between December 2014 and January 2015. Although on an annual basis, average rents in England and Wales were up by 2.8 per cent in January 2015 compared to last year.
Director of Reeds Rains and Your Move, Adrian Gill, described the nature and affordability of housing in the UK as “transforming before our eyes”.
He said that during the last five years, the private rented sector has managed to absorb an unprecedented influx of tenants while rent prices have largely tracked inflation.
“As ever, the devil is in the detail – but as this growth accelerates, even more investment will be necessary for the industry to keep up,” he said. “So we need more buy to let landlords to help solve the crisis in demand for homes to rent.”
The estate agent director explained that like the buying market, the only clear way to make rented housing significantly more affordable is by building more homes, more quickly than the current rate.
“Until this happens, landlords are likely to continue to earn double digit returns on their investments,” he added.
Eight out of ten UK regions recorded lower rents in January 2015 compared to a month previously. The East of England and the North East bucked this trend, seeing 1.3 per cent and 0.7 per cent growth, respectively.