The operations director at the largest lettings agency in the UK has outlined her predictions for the future of private renting.
Lucy Jones of LSL Property Services, producers of the Buy-to-Let Index, told the Council of Mortgage Lenders that their projections indicated that, by mid-2015, average rents in England & Wales will reach £800 per month.
By May next year,that average figure will be £765 per month.
She said: “Fundamentally, buying a home is still becoming less affordable, not more. Renting was the future before the recession and it’s still the future for millions. By the middle of this decade at least one in five people in the UK will be living in privately rented accommodation.
“At some point in the summer of 2015, rents are set to reach an average of £800 per month. Such levels of demand show the practical importance of this industry – and the importance of the financial mechanisms that make its expansion possible.”
A heat map of rents makes the scale of variation across England and Wales clear. London’s average rent has increased by 18 per cent over the last three years, with the latest increases touching eight per cent a year.
However, rents in the South West haven’t changed at all from their levels at this point in 2010.
Lucy confirmed: “As before, there will be serious regional variations. Rents in London are already 109 per cent higher than in the North East.
“Over the next two years, London will see rents rise by 16 per cent. Meanwhile, the East Midlands will see rises of around eight per cent – and rents in the South West look likely to pick up by only around one per cent by 2015, or less than half a percentage point a year.”
Based on demand since 2010 and expected changes in the housing market, LSL can forecast the trajectory of rents between now and the middle of the decade.