According to the latest Buy to Let Index from LSL Property Services Plc rents have risen, in February, by 0.2 per cent to £684, an annual rise of 3.9 per cent. Tenant arrears, however, have risen to 12.6 per cent as renters continue to feel the pinch of from the ever increasing cost of living and from a lack of pay growth.
Paul Jardine, Director of Templeton LPA commented:
“Persistently high tenant arrears are proving to be a growing headache for many landlords. Tenants are beginning to feel the financial squeeze triggered by near record rents, growing inflation and the VAT hike. With public sector spending cuts continuing to take its toll on many tenants’ employment situation, rental arrears are likely to remain stubbornly high over the medium term.”
Rents in London have increased at twice the national average, 7.7 per cent over the last twelve months.
David Brown, Commercial Director of LSL Property Services, commented:
“The fierce competition among renters in many areas of the country has cut short the traditional lull we tend to see between December and February. The consistently constrained level of lending to home buyers has bolstered demand — and rents — in the private rental sector during what is typically a slower period. 158,000 fewer first time buyers were unable to enter the market in the last twelve months, compared with three years ago. With the mortgage market even more sluggish since the start of 2011, this backlog of frustrated buyers has increased even further and rents have risen correspondingly.”
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