Renting Costs Now Outstrip Inflation

AFS Team·20 February 2020·4 min read
Renting Costs Now Outstrip Inflation

Renting Costs Now Outstrip Inflation

The cost for tenants to rent a property in the UK is now rising more quickly than the rate of inflation, a rental index reveals.

According to HomeLet, the average monthly rent in the 12 months to January grew by 2.3%.

This means that the average rent now being paid is £953 a month, that's £23 higher than in January 2019.

However, rents in London rose by 2.5% over the same period to reach £1,627 per month.

When London's rents are excluded from the figures, the average rent stands at £793 per month.

When compared with the consumer prices index, inflation in January was 1.3%.

The largest rent increase year-on-year

The region recording the largest rent increase year-on-year, is for landlords in the North West where there was a rise of 8.7% in rents in the 12 months to January.

Of the 12 regions being monitored, nine recorded rent value increases and four of them were higher than 5%.

In addition to the North West, rents in Wales rose by 7.3% and in Scotland, they grew by 6.2%.

In fourth place is the East Midlands with an annual rent rise of 5.1%.

The data highlights that rents in Northern Ireland rose by 2.8% and in Greater London by 2.5%, followed by Yorkshire and Humberside with rent rises of 2.4%.

In the North East rents rose by 1.1% and in the West Midlands, they grew by 0.9%.

However, rents in the South East fell by 0.1% in that period, followed by the East of England with a fall of 0.2% and in the South West rents dropped by 0.9%.

Fears over deposit-free renting schemes raised

Meanwhile, fears over the growth of deposit free renting have been raised because tenants are not being told that they could be paying more over time, one report reveals.

According to the BBC, the growth of nil-deposit schemes are now commonplace as they become increasingly popular with tenants, but an investigation revealed that some letting agents may be potentially mis-selling them.

According to government guidance, an agent or landlord cannot insist that a tenant uses an alternative route to a traditional deposit, but they could offer it as an option.

Now property ombudsman Katrine Sporle says growing numbers of tenants are reporting bad experiences with some being told that they must use these deposit free schemes before they can rent with a particular agency.

One of the big issues highlighted is that tenants need to be told that the fees for arranging a deposit free scheme are usually non-refundable.