Following six months of annual rent price increases of 10 per cent plus the latest HomeLet rental index reveals that the average price paid in rent slowed to an average annual increase of 8.5 per cent across the UK in September.
Strong demand from tenants and an undersupply of properties have continued to place upward pressure on rents, with nine of the 12 UK regions analyzed seeing rent prices increase on an annual basis in September, led by gains in Scotland at 8.4 per cent, followed by the East Midlands at 7.7 per cent and Greater London at 6.6 per cent.
In contrast, rents fell by 4.6 per cent in the North West, were 2.2 per cent lower in East Anglia and dropped by 1.4 per cent in Northern Ireland.
Martin Totty (left), Chief Executive Officer of Barbon Insurance Group, parent company of HomeLet, said, “Affordability is an important factor in determining rents. Depending on what happens with inflation and real incomes over the coming months, could have a bearing on future rental price trends especially where, in certain areas of the country, the supply of rental properties is not keeping pace with demand from those wishing to be private sector renters.”
The new figures from the ONS suggest that first-time buyers hoping to get a foot on the housing ladder must now come up with close to £8,000 more compared with a year ago in order to afford a deposit of 10 per cent, while requiring a salary of around £45,000 a year.
The price rise for first time purchasers comes despite Government efforts to make properties more affordable for young buyers through schemes such as Help to Buy and reflects wider growth in house prices which surged to a record peak of £284,000 across the UK in August.
Rob Weaver, Director of property at residential investment platform Property Partner, insisted that more needs to be done to help first time buyers.
“Housing has become the biggest challenge of our age, particularly for the under-35s, but we’re doing nowhere near enough to help them,” he said. “The low level of new homes being built is one of the factors driving up prices, and this is an area where we need innovative solutions to tackle the problem.”