Private tenants are ‘silver lining’ in cost of living crisis
The Office for National Statistics estimated that private rental prices have risen by 7.3% since 2007, keeping roughly in line with inflation, which stood at 1.9% annually to June.
Faulkner said: “Wages not rising in line with inflation is a real disaster for tenants from a general cost of living perspective, but the only real conclusion that can be made about rents currently is they are the one ‘silver lining’ in the cost of living crisis.
“The biggest problem we have now and have had since the credit crunch is wages are not keeping up with inflation, which means both tenants and landlords are being heavily squeezed.
“The key issue for rents is the ‘battle’ between inflation and wages. Currently inflation is winning hands down.”
Predictions of yearly rental growth stood at around 2% for the mainstream market and 2.5% in Prime London at the start of the year, while the LSL Property Services Buy to Let Index recently revealed that rents in England and Wales were 1.4% higher year-on-year in June as Faulker added “forecasters in this market have performed better, in the main, than those forecasting house prices”.
If private renters are the ‘silver lining’, the biggest losers are social renters, as average rents have increased by nearly 28% in England since 2007 from £61.62 to £78.78.