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FAMILIES REACHING 'CRISIS POINT' WITH RISING RENTS

FAMILIES REACHING 'CRISIS POINT' WITH RISING RENTS (News (General))

by administrator @, Friday, July 20, 2012, 09:05

Shelter has warned that families may be reaching "crisis point" after the LSL rent index showed that private rents have risen for the third month in a row.

The latest Buy-to-Let Index from LSL Property Services plc revealed that rents rose for a third consecutive month in June, hitting a record high in London.

In June, the average rent in England and Wales rose by 0.9% to £718 per month, just shy of the record high of £720 pcm in October 2011. As a result of the monthly rise, the pace of annual rental inflation also increased, climbing to 2.4% from 2.3% in May.

On a monthly basis, rents rose in all regions of England and Wales but one. Wales saw the largest rise, with rents increasing by 2%, followed by the North West and West Midlands where rents rose by 1.7%. But rents dipped in the South West, falling by 0.3%. Following a rise of 0.9% to £1,047, London's rents hit a new high for the second month in succession.

London remains the region with the fastest annual rental growth. Rents in the capital climbed 4%, with tenants paying an average of £41 extra per month compared to June 2011. The South East had the second highest rental inflation, with rents climbing 3.6% compared to a year ago. On an annual basis, rents remained in negative territory in just the East Midlands after the North East and Wales returned to growth.

David Brown, commercial director of LSL Property Services said: "The sheer weight of tenant demand continues to push up rents across the country. Lending criteria remains tight and the number of mortgages given to first-time buyers - especially those without substantial deposits - is still a long way from the level seen before the credit crunch.

"With higher rents and the growing cost of living eroding how much tenants can save towards the large deposits required to buy, it's no surprise to see the private rented sector swelling by 262,000 households a year.

"But shorter-term factors were also at play in June. The rental market tends to see a flurry of activity at this time of year as tenants look to move before the onset of summer holidays, but this trend has been exacerbated - especially in London - by tenants moving with urgency to secure properties ahead of the disruption of the Olympics."

Campbell Robb, chief executive of Shelter, warned that for renters, the rise is yet another cloud in the gathering storm.

He said: "Rising rents at a time when wages are flatlining mean that many families are reaching crisis point, cutting back on food and other essentials just to make ends meet.

"Renting in this country is the worst of both worlds. Government figures released earlier this month show that on average, renters pay out £75 a month more than those with a mortgage, but it's frighteningly insecure, with landlords able to evict with just two months notice. Yet with rising numbers of hard-working families locked out of home ownership, there's no doubt that rental Britain is here to stay."

www.shelter.org.uk

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