Housing: Help To Buy Fails To Dent Rent Costs

Private rents have reached a new record high despite Government efforts to make it easier for people to jump onto the housing ladder.

According to LSL Property Services, which owns the Your Move and Reeds Rains chains, rents across England and Wales reached a record £757 a month on average in September after jumping by 1.8% month-on-month.

Record rents were recorded in seven out of 10 regions across England and Wales, a development the charity Shelter described as "devastating" news for tenants.

Rents reached new peaks in Wales, London, the South East, the West Midlands, the East Midlands, the North West, Yorkshire and the Humber, LSL said.

Average rents in September ranged from £533 a month in the North East to more than double this amount at £1,141 in London.

Annual rental growth in London is running at more than 4%

LSL said this meant that rents are now typically £13 higher than the previous high recorded in October 2012.

It measured annual growth in London at 4.4% on average while Wales saw the next biggest annual rise, with a 3.1% hike.

The East of England was the only region to see rents drop, either on the year-on-year or monthly measures, falling by 1.4% annually and by 0.8% compared with August to reach £739 typically.

The findings show how strong levels of demand for homes are persisting in the private rental sector, despite a string of Government measures designed to ease the leap onto the property ladder.

A new phase of the Government's flagship Help to Buy scheme to offer state-backed mortgages to people with deposits as low as 5% was launched this month.

Mortgage lenders have been handing out more loans to first-time buyers in recent months than at any other time since the credit crunch started.

This was reflected in separate figures from the Council of Mortgage Lenders (CML), which showed gross lending 41% higher than in September 2012.

The CML put gross lending for the third quarter of 2013 as a whole at an estimated £49.3bn - almost 18% up on the second quarter and at its highest level since 2008.

But critics argue that more needs to be done to tackle the underlying problem of a shortage of homes, both for sale and for rent.

Roger Harding, Shelter's director of campaigns, policy and communications, said: "As more people are priced out of home ownership and waiting lists grow longer, too many families are being left trapped in the unstable and expensive private rental market.

"Every day, Shelter hears from people who are having to cut back on essentials as they struggle to pay their rent each month.

"With wages flat-lining, the fact that rents have reached record highs means that even more people will find it harder and harder to make ends meet.

"We need the Government to fix our rental market to provide more security and get on with building many more genuinely affordable homes."

David Newnes, director of LSL Property Services, said: "Higher rents in almost every region show that, despite Government schemes, buying a first home is still a difficult aspiration.

"This is not only down to low salary growth, but also a general shortage of supply, which is the underlying reason why homes are getting more expensive."

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