According to a new report released by LSL Property Services the average cost to rent a property in England and Wales has risen for the second time in a row. The average cost to rent a property is now £712 a month, a 2.3% rise on the same time last year.
The statistics suggest that the cost of renting is rising fastest in London and the South East.
Why is Rent So Expensive?
There are many reasons why the cost of rent is increasing but mainly it is a supply and demand problem. The demand for rented accommodation remains high and as such the price is constantly increasing. The reason demand is high is because the availability of first time buyer mortgages is not necessarily competitive.
First time buyer mortgages are available from a 5% deposit and many lenders are offering 4 times a person’s salary to acquire the mortgage. However, raising the money to purchase a property can be difficult, particularly in an uncertain market. It is forecast that property prices will decline by up to 10% in the next year.
Stamp duty, which was frozen, has now been re-instated and this is a further expense for people purchasing property.
Consequently, the demand for rented properties is increasing which in turn is increasing the monthly costs.
“Can’t afford to Live”
The main problem with increasing rent is that large numbers of people are struggling to make ends meet as it is. If the rental costs continue to climb then it can become difficult financially for people to survive.
Rent is not the only monthly expenditure to increase in the last few years, as gas, electricity, food and petrol have all increased too. The combined monthly increase means the cost of living is a lot more expensive. The most recent increase in price will be to petrol as the cost for a litre of unleaded will reach £1.40 shortly.
Continued increasing of costs can push people into debt, or those already in debt it can mean they are unable to make the monthly payments towards their debts without continuing to borrow.
If you have debt and find the cost of living too expensive then there are some debt solutions which could help you manage you debt more affordable. You can telephone Debt Support Trust free of charge on 0800 085 0226 for more information.