UK rents up 4.6pc
Tenants are getting older, as under-30s accounted for 42% of new tenancy agreements signed compared to 52% a year ago.
Countrywide attributes this figure to the 50% increase in mortgage lending to first-time buyers over the past 12 months, as the average age of homebuyers using the Help to Buy Equity Loan scheme is 29.
In the first half of 2014 rents grew at roughly twice the rate of the same period in 2013.
Nick Dunning, group commercial director at Countrywide, said: “The recovery in mortgage availability, government Help to Buy scheme and improving sentiment in the housing market has seen a wave of tenants move into home ownership.
“This flow of tenants out of the sector saw demand for rental properties in many areas ease, resulting in below inflation rental growth in some areas in 2013.
“With changing conditions in the sales market meaning that many of those tenants looking and able to buy have already made their move, rental growth looks set to accelerate.”
Unlike in 2013, when rents grew quickest across parts of Northern England, outer London and the East of England has seen fastest growth, accounting for 40% of employment creation over the last 12 months.
The rental market is highly seasonal, as rents traditionally grow quickest over the summer months as contracts are renewed, tenants begin their search for new property and student’s look for next years’ accommodation.
Dunning added: “Over the medium to longer term a lack of supply will increasingly put landlords in a stronger position to ask for, and achieve, higher rents.
“Significant upward pressure on rents will come from a lack of house building, particularly in London, the South East and other major conurbations with sound fundamentals experiencing population growth.
“Equally, any move by the Bank of England to raise interest rates will serve to push up mortgage costs, making it harder for those with smaller deposits, in particular, to get on the housing ladder.
“The single best way to alleviate upward pressure on rents is to build more affordable new homes, both for rental and for sale.”