Business is booming in the buy to let industry and according to recent figures, the average rent in England and Wales is now more than £800 per month. And in London, rents are now a staggering £1,272 per month, which represents a 5.8% increase. The only areas where the average rent has fallen are Wales and the West Midlands.
Obviously this is good news for landlords, but it does rather beg the question of how much longer can tenants continue to afford paying such high rents. At the moment, demand for rental property is very high, which is the reason why rents continue to rise, but with the cost of living rising too, and the average income failing to follow suit, more and more tenants are going to struggle to meet their rent commitments. However, despite the doom and gloom, tenant arrears were down in August, which is also good news for landlords.
It is interesting to note that the average age of a tenant is now 32, which is lower than in previous years. Many young people can no longer afford to buy a home, therefore increasing numbers are renting homes or staying in the parental home for longer and renting is becoming the norm rather than the exception, as it was ten years ago. Hopefully this situation will improve, however, as the government is introducing a Funding for Lending scheme to boost the first time buyer market and ease the pressure on the UK housing market. Let’s hope it works!
