Rents rising twice the pace of wages

Wages have grown at half the speed of rents in the last 12 months according to the latest Buy-to-Let Index from LSL Property Services.

As of November, the average rent across England and Wales now stands at £753 per month, a rise of 1.6 per cent from November 2012’s £741.

By comparison wages have grown by just 0.8 per cent in the same period. Average monthly pay before tax reached £1,941 in November, up from £1,926 in November 2012.

Despite the annual rise in rents, the last month has seen a drop in average rent across England and Wales of 0.7 per cent from £744 per month.

Eight out of 10 regions saw monthly rents fall between October and November. The steepest of these falls was in the West Midlands where rents are down 2.6 per cent from £557 to £542 in November.

But the South West saw rental growth of 1.1 per cent from £650 to £657 in the same period while rents in Wales rose by 0.2 per cent from £564 to £565 in November.

London experienced the sharpest annual rise in rents with appreciation of 4.4 per cent from November 2012’s £1,104 to £1,153 this year.

Lettings activity also grew in November, with the number of new tenancy agreements in England and Wales jumping 1.5 per cent compared with November last year, despite a drop of 6.3 per cent from October 2013.

LSL Property Services commercial director David Brown says: “Economic recovery is spreading throughout the UK. The property market is the leading edge of that wave.

“As the home purchase situation heats up, the effect on the rental market is even less uniform – with rises accelerating in some areas and slowing across others.”