Rents Are Increasing Quicker Than Inflation

Average monthly rents have increased by 3.8% over the past year, which means rents are increasing at a rate quicker than inflation, one index reveals.

The figures from HomeLet highlight that the average rent is now £940 per month in the UK.

The figures are based on new lets being agreed by agents and landlords using the firm's referencing facility and when London rents are excluded, the average rent rose by 3.2%, with the average rent there costing £782.

Rents in the capital are still the most expensive with an increase of 4% over the past year to reach £1,599 per month.

Biggest year-on-year increase in rents

However, the biggest year-on-year increase in rents was seen by landlords in the south west, who saw rents rise by 7.7% and are now £868 on average.

HomeLet also says that in each of the 12 regions being monitored, they all saw rents rise in February.

One reason for this is that rents are rising in response to the extra costs facing landlords, plus there is strong demand from tenants, particularly from those who are struggling to buy a property.

The data also highlights large variations within London with landlords in Wandsworth seeing rises of 10.1% and in Haringey and Islington, rents rose by 9.6%.

However, in Croydon rents fell by 3.7% and in Hounslow and Richmond, they dropped by 3.2%.

The most expensive rents in the capital are in Westminster at £2,281 per month, followed by Lambeth at £2,059 per month.

Landlords contribution to the economy will increase

Meanwhile, research has revealed that the UK's private rental sector is paying more in income tax than Tesco's entire tax bill.

According to the National Landlords' Association (NLA), they estimate that the total income tax paid by private landlords is more than £3.8 billion every year.

That's twice Tesco's annual tax bill of £1.63 billion.

The NLA's chief executive, Richard Lambert, said: "Private landlords are making a big contribution to the public purse - far from being subsidised by the taxpayer."

He added that the tax liability seen by landlords has increased by so much in recent months that many landlords have decided they cannot make enough money and have closed their business.

Mr Lambert said: "Our conservative estimate is that a landlord's tax liability suggests they are paying more than double in income tax than Tesco's entire tax bill and it's a staggering 62 times the corporation tax bill for Amazon in the UK."