A leading supplier says rent rises seen in recent months have been driven by increased taxes and regulations imposed on landlords.
The claim comes from Andy Halstead, HomeLet & Let Alliance chief executive, in the light of a new record high UK average rent of over £1,000 per calendar month.
Halstead says: “Throughout the Coronavirus pandemic, the government rightly took measures to protect tenants but didn’t go far enough to balance the protection for landlords.
“It’s a continuation of the theme that we’ve seen for many years, with landlords being penalised by higher taxes and increased complexity in obtaining possession of their properties.
“In simple terms, increased costs for landlords mean increased costs for tenants. Some landlords have exited the market whilst the stamp duty holiday has stimulated the sales market, impacting the stock level. These are all factors driving an increase in rental values for new tenancies, which are way above the rate of inflation.
“The private rented sector plays a critical role in the UK’s housing market. As restrictions begin to ease, the flexibility provided by rentals will be crucial to mobility across the UK and as a means to access affordable housing that fits the varying needs of a diverse range of tenants.
“The sector works best when there’s a mutual balance between tenants, landlords and letting agents. The Government can’t treat the rental market as an afterthought. Policies that solely focuses on homeownership will only deepen the issues in the UK’s housing market.
“Some people might be shocked to see the average UK rental price tip over the £1,000 mark, yet supply and demand dynamics will only continue to drive rental prices upwards for the rest of the year, and we’ll see more records broken in 2021.”
HomeLet’s latest figures show the average UK rent now stands at a record £1,007 per calendar month - the highest ever.
That’s up 5.9 per cent on the same time last year, and up 7.0 per cent on this time two years ago.
London sees its first price increase for over a year, with an annual rise of 1.5 per cent to £1,607 ppm - although this is still lower than pre-Covid, when the average was £1,611 back in June 2019.
Excluding London, the average UK rent is actually 8.0 per cent higher than last year, up to £861.
South West England saw the highest annual price rise, with the current average price of £948 ppm, marking a 10.5 per cent increase on this time last year, and a 12.6 per cent increase on pre-Covid levels.
Scotland has seen the most significant rise in just the past month, with the average price rising 4.4 per cent to £738 pcm in June.
Elsewhere, rent prices in the North East fell by 2.3 per cent compared to last month to an average of £547, one of only two regions to see a month-on-month price dip.