UK rents rise by 2.4% in year to July 2016

Rents in Britain’s private rental sector rose by 2.4% in the year to July 2016, according the latest figures released by the Office of National Statistics.

This was the same rate of growth recorded in the twelve months to June.

Regional rental rises

Data from the report shows that over the year to July, rents in England rose by 2.6%, in Scotland by 0.2% and were unchanged in Wales.

In fact, rental prices increased in all regions of England during the period. The most prominent increase was in the South East, where rents rose by 3.5%. Next came the East, with increases of 3.1% and London with rises of 3%.

The smallest annual rises were reported in the North East, up by 0.9%. The North West recorded rises of 1.2%, with Yorkshire and the Humber showing increases of 1.3%.

Since the beginning of 2012, rental prices in England have increased by 1.4% and 3% year-on-year. However, the lack of forward movement in Wales means that rents here are well behind. Scottish rental increases have slipped from a high of 2.1% in the year to June 2015.

Figures from the UK House Price Index shows that over a longer period, residential house price growth has been greater than rental growth. Between January 2013 and June 2016, the average 12-month rate of house price inflation was 6%. This is in comparison to 2.1% for rental fees.

UK rents rise by 2.4% in year to July 2016

Deposit struggles 

An annual rise in rental prices has underlined the struggles that many people living in the private rental sector are facing in raising a deposit. Richard Connolly, chief executive officer of RentPlus has described this as the biggest barrier to homeownership.

He noted, ‘The issue of increasing rents is not confined to London with the largest rental price increases in the South East, followed by the East of England, which highlights the fact that housing affordability is firmly a national issue.  The struggles are numerous with aspirant home owners in the current climate also facing rising fuel bills, low salary growth and low interest rates from savings accounts.’[1]

‘This all points to the urgent need for a rethink in this country on the housing models that are used to migrate people into home ownership. New innovations such as rent to buy models, which allow people to benefit from affordable intermediate rents and make real savings toward a home of their own, ought to be part of an inclusive UK property market which provides secure affordable housing options for all,’ Connolly added.[1]

[1] http://www.propertywire.com/news/europe/uk-private-sector-rents-2016082512309.html