Average rents rise to 41% of monthly earnings

National rents showed no sign of slowdown in October, up 1% on month and 11% annually to £785 per month – 41% of the monthly national average wage (£1,937) according to the latest Sequence’s National Rental Report for November 2013.

London rents stand at £1,484, up 2% on month and 9% on last October – 44% of the average London wage (£3,338.50) whilst the supply of new rental property has dropped 4% on month nationally.

The supply of London rental property has fallen to a record 11% on month while demand has risen 2%. Buy-to-let mortgage applications have increased 55% annually.

Stephen Nation, Head of Lettings Sequence Group at part of the 300 branch which also includes, Barnard Marcus, William H Brown, Fox & Sons and other leading brands, comments:

“We have seen an unprecedented rise in rents over the last month, with tenants now giving up 41% of their monthly pay packet in rent. The fast tracked introduction of Help to Buy has done nothing to dampen the strength and rate of growth of the rental market (rents up 11% annually), and with the number of properties available to rent still falling short of demand, rents will only continue to rise.

“The shortage of rental property is particularly acute in London with a record 11% monthly decrease in supply coupled with a 2% increase in rental applications. As a result, rents now represent 44% of the average Londoners monthly salary, putting further pressure on the budgets of those in the Capital.

“In spite of a 55% increase in buy-to-let mortgage applications, prospective investors are facing stiff competition for property from private buyers and are often unable to secure their investment property. Across the board whether it is in the sales or rental market there is a universal need for more properties. Competition for houses will continue to impact on affordability and squeeze household budgets across the country for the foreseeable future.”

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