Rental prices hit a record high in the last month, with the average monthly UK rent at £757 a 2.1% rise on last year’s figures. Despite the growth in mortgage lending from the Help to Buy scheme it seems demand for rental properties will not be declining any time soon, as many first time buyers are still unable to save for a deposit.
The south of England is predominantly ahead of the north with prices more than £200 more expensive, and London costing more than double the price of renting in the north east. The property stock in London is forever dwindling so most have realised if they want to live and work in the capital they will need to rent, without even considering purchase. Whilst the property market revival is national, the south is still taking the lead, with the minute north figures being sugar coated with average statistics.
Why do people like to rent? There is a short term appeal for many individuals and families looking to rent, they have the mobility and flexibility when contracted for only a year or two. Especially with employment patterns changing and competition for jobs so high, those looking for work need to have some flexibility in their ability to move regions in order to enhance their employability. However, what was meant to be short term is now progressing into more permanent contracts as it is taking longer to gather a deposit for purchase. Some may say that renting is money down the drain, but the attitude towards renting has changed significantly over preceding years with property prices rising beyond attainable rates.
Is there a rotational trend occurring? Landlords and investors are reacting to the rise in rental demand and prices, by continually searching for new properties to progress their portfolio, which in turn pushes up the prices for residential purchases. Thus resulting in those not yet on the property ladder remaining incapable of progressing onto that level, returning demand back to rental properties.
Although witnessing rising prices can be discouraging, they should be considered as a positive indication for the economy, with inflation becoming more stable at 2.7% and activity trends improving, both the property and rental markets are in a much stronger position than in previous years. Garrington Property Finders can support you throughout your property search, securing you the best price for either rental or purchase.