Rent increasing faster than rate of inflation

The cost of renting a property in England and Wales is rising faster than the rate of inflation.

According to a report by LSL Property Services, the average monthly income rose by 3.5% in the last 12 months to May 2013 whilst the increase in the cost of living was 2.7%.

The average price of renting in England and Wales has increased to £737 per month and is predicted to rise to £800 by 2015.

Despite regional fluctuations the data showed that rents are higher in six out of ten regions than in May 2012.  The highest increases were seen in the capital where they rose 7.2% to an average of £1,113, Wales at 5.2% and the North East which saw an average increase of 4% over the year.

Demand in the rental market remained high due to those struggling to buy their first home, swelling the number of new renters by over 5%.

Director of LSL Property Services David Newnes said:

“With wage growth so weak compared to inflation and house price growth, it looks like deposits will become less affordable – which will keep demand for rented accommodation high….  May’s figures are consistent with our longer term predictions – that private renting will become a more and more vital aspect of the economy.”

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