Tenants Feel the Strain of Rising Rents and InflationMake Text Bigger
Soaring buy to let rents and the rising cost of living are putting pressure on tenant spending power.
Rents were up 1.2 per cent in August – but rent arrears also increased for the first time since April, according to the biggest letting agent across England and Wales, LSL Property Services.
Average buy to let rents hit £713 per month – £8 a month up on the previous peak of £705 registered in July and the highest monthly increase in a year.
Although average rents are rising – the figures dropped by 0.4 per cent in the West and East Midlands.
The biggest increases were in Wales and the South East (both 2.1 per cent); London (1.5 per cent) and the South West (1.3 per cent).
LSL Property Services, which owns letting agent brands like Your Move and Reeds Rain, reckons average rents in London are £1,025 a month, £177 per month less than the average rental figure of £1,202 released a few days ago by tenant referencing firm Homelet.
LSL Property Service managing director David Newnes also disclosed tenants arrears increased, but explained this is an expected seasonal blip due to many tenants choosing to spend their money on summer holidays rather than rent.
In August, 10.7% of all rent was unpaid or late by the end of the month. This is up 9 per cent compared to July. Unpaid rent totaled £300 million, up 19.5 per cent from the £251 million unpaid in July.
“The holiday season often takes its toll on tenant arrears, with many households squeezed by summer holiday spending. While we expect arrears to fall back into line in the short-term, the growth is indicative of the mounting pressure facing tenants,” said Newnes.
“With rents rising so quickly, soaring inflation and an uncertain economic outlook, over the long-term we anticipate that rental arrears will become a growing financial problem for landlords.”
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