Rent on the rise and house prices peak
The good news announced by the Government yesterday was that unemployment has fallen for the first time in almost a year. Now for the bad news, both house prices and rents are rising with the average UK rent increasing by 2.6% in March, according to a survey by Homelet and the average house prices are up by 0.5%, according to Rightmove House Price Index.
The average rent for the month of March was £764 a month and London rents are at an extortionate figure of £1,156 a month on average. Tenant’s incomes are also on the increase at 1.2% but this figure is no where near enough to cope with the rent increase, especially because London incomes have dropped by 3.5%. The small increase on average incomes will only be a small help compared to the large increase of rents and it’s likely that tenants budgets will be stretched ever further.
Usually, rents rise around the month of September, when more students are looking for properties available to let but the level of affordability for rental property varies dramatically around the region.
Ian Fraser spoke to Property 118 about the rent increase and said, ‘To ensure long term growth after the economy has recovered, the private rented sector has to offer value for money, and while demand is high, it’s important that the quality of rental stock does not deteriorate.’
Mr Fraser advises that sharing a property, particularly in the capital, will help relieve the financial strain for tenants.
The typical asking price for a home on the market this month is £243,737, a 0.5% increase on the last peak recorded in May 2008. Even the amount of properties on the market has increased by 8.1% outside of London but the overall supply of homes are down by 30% in comparison with the figures from April 2007, according to Rightmove.
The average asking price in London is at an astonishing £500,000, which is a historical high and properties in the South West are at a record smashing average high of £270,735 yet supply is down by 5.5%.
On the opposite side of the scale, house prices have dropped in Wales, Yorkshire, the North West and Humberside with figures down 1.5% compared to last year.
Miles Shipside, who is the Director of Rightmove spoke to the Independent and advised that, ‘Doing research in your area is essential to gauge what type of property is in demand, how quickly it is selling and how close to the asking price is being achieved.’
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