Rental property shortage pushing prices up
Large parts of the UK are suffering from a shortage of properties to rent as rents rise and pay packets remain stagnant, research from Landbay suggests.
Average monthly rents ended 2015 with a slight seasonal dip of -0.2% from £1,289 in November 2015 to £1,286 in December 2015.
The December data means that average rents for the UK in 2015 were £1,280, up 3.8% on 2014.
The figures mean that rents in the UK grew twice as fast as wages, which climbed 1.9% in 2015.
Compared to 2014, three bedroom properties have seen the biggest increase in the average rental price, up 5.2% to £1,484 in 2015 suggesting that family homes and properties for sharers are in highest demand.
John Goodall, co-founder and CEO of Landbay, said: “Rents often track wages as consumers with more pay compete for the most desirable rental properties.
“But the fact that rents are outpacing wages is a clear sign of the shortage of properties to rent as large parts of the UK face an acute housing shortage.
“Based on its recent policy changes for the private rental sector such as the new stamp duty surcharge and changes to tax relief on mortgage interest, the government seems intent on weeding out amateurs from the ranks of new buy-to-let investors.
“If it is successful, our rental index suggests that the result is likely to be higher rental income for the professional investors who are not impacted by the changes.”