Rents across the UK continued to rise during August continuing 2016’s trend of modest inflation. The latest Homelet Rental Index found tenants who signed up to a new tenancy during the month to September 1, agreed to pay an average monthly rent of £913, a 3.1% increase year on year.
For London the rise was even less pronounced at 2.8%.
Homelet owner Barbon Insurance Group’s CEO Martin Totty said: “The latest index reflects a private rental market where landlords are engaged in a delicate balancing act – they’re acutely aware of tenants’ concerns about affordability while also conscious of the need to achieve their target yields against a backdrop of rising costs.
“August’s figures suggest that rents are continuing to rise at a sustainable pace – ahead of price inflation, but well below house price increases, which were running at close to 6% according to the most recent data.
“In the medium to longer term, the fundamental driver of rents will be the balance between demand and supply for rented property.
“We expect demand in the private rental sector to continue to grow, in line with demographic changes such as population growth, and as affordability concerns remain in the house purchase market, so it is important that we see efforts to support supply.”
The index also revealed the average rent in London was 64% higher than the rest of the UK for August, standing at a monthly outlay of £1,497. However, the gap between the capital and the national average had barely changed from figures from the same month in 2015.
Locally Tower Hamlets saw an annual increase of 5.3% with figures of 4.8% and 6.5% for Greenwich and Newham.
Lewisham bucked the London trend of rises however, recording a year-on-year drop of 1.43%, sending the monthly cost of renting a home down to £1,484 in the borough.
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