17:59 PM, 15th April 2011, About 10 years ago
The great property divide between London, the southeast, and the rest of the country has now started to extend in to rents.
Survey after survey in recent months has confirmed house prices in the region are outstripping those in the rest of the UK.
Now, the latest letting survey has confirmed rents are going the same way.
The study by LSL Property Services, the UK’s largest letting agent that runs brands like Your Move and Reeds Rains, reveals landlords increased rents last month by 0.4% to an average £687 per month – up 4.2% since March 2010.
With rents moving up and house prices dropping slightly, yields increased to 5.0%.
The real story lies behind the headline figures.
In March, rents were up in east (2.2%) and down in the southwest (-1.6%) and West Midlands (-1.3%).
In the past year, London, rents have surged up by 7.3% – almost double the UK average – and by 6.7% in the south east, while rents in the southwest (-2.4%) and Wales (-1.5%) have fallen.
David Newnes, estate agency managing director of LSL Property Services, said: “Landlords are seeing demand for their properties go from strength to strength.
“Although more high LTV mortgage products are coming onto the market, there is still not much money at that level, and first-time buyers simply can’t afford the average £25,000 deposit lenders require without substantial aid from parents.
“As a result, most would-be first-timers are remaining in rented accommodation for nearly a decade. The growing demand continues to outstrip supply, and this is pushing rents upwards beyond the rate of inflation and well above wage rises.
“At the current rate of increase, the average rent will top £715 this time next year. London and the South East are the two regions that are coping best with the economy in its present state, and are least likely to be affected by public sector job losses.
“It’s unlikely that rent rises will fall away any time soon in these areas. In fact, at their current pace, London rents are likely to hit £1,050 in a years’ time.”
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