With the task of getting on the housing ladder being much harder than it used to be, demand for rental property has grown substantially in the UK over…
With the task of getting on the housing ladder being much harder than it used to be, demand for rental property has grown substantially in the UK over recent years.
This trend has, naturally, pushed up prices, not least in areas where the available supply has struggled to cope with demand. Examples of this would include cities such as London where house prices are highest, or university towns where professionals may have competition for the private rental stock from students.
New figures from letting agents' insurer Endsleigh have revealed the trend continued in 2011, with the average monthly rent being £706, compared with £688 in 2010 and £663 in 2009.
Central London remained the most expensive place to rent at £1,330 per month, but this figure bucked the trend by dropping three per cent from its 2010 figures.
Rental costs for London as a whole remained the highest at £1247.63 on average, with Watford second on £1060.00
Grant Stevens, the general manager of letting services at Endsleigh, said: "With the overall rise in keeping with inflation, it won't unduly affect the pockets of either landlords, who are enjoying good yields, or renters, who are able to access a whole range of properties."
However, for some that may not be the case. People struggling to pay off their debts may find life particularly difficult as this process continues, particularly those whose income is not rising to help cover the increasing cost. Inflation may be lower than it was last year, but where pay freezes are in place that still amounts to a decline in real incomes.
The south as a whole was far more expensive than elsewhere, accounting for the top ten rental averages, while the ten cheapest were made up of six northern English locations, plus three in Scotland and Swansea in Wales.
Swansea is the least costly overall at £398.50, with Sunderland being the cheapest in England at £451.93 and the lowest average price in Scotland being the £456.86 paid by renters in Kirkcaldy.
Of this latter list, only the tenth cheapest – Bradford – is a major city, which may indicate that average rents are pushed up in some regional centres of population by the emergence in recent years of more city centre rental opportunities for relatively affluent professionals. Big cities like Manchester, Birmingham and Leeds may be cases in point.
Mr Stevens suggested the central London figure was "no great surprise" because it was a particular market that had seen a major boom.
This area may indeed have passed its peak for other reasons. Unlike other parts of London, population growth in the decade to 2011 was low, with Kensington and Chelsea actually experiencing a fall in population, while the City of London remained unchanged.
By contrast, renting costs may be higher in London boroughs where the rise was highest. Five of the six highest population increases in the country came in such authorities, led by Tower Hamlets (up 26.4 per cent) and followed by Newham, Hackney, Hounslow and Greenwich.
The only non-London borough in the top six was Manchester, where the growth in city centre living will have played a major part in the population increase. However, the number living in the heart of Manchester will have been far less than the overall population increase of 80,000, with the city centre ward – accounting for most of these – having a total estimated population of 15,833 (out of 498,000) in 2010.
As a result, renters in parts of London and Manchester alike may find their rental prices under more upward pressure than most.
By James Francis