Market Research Finds Londoners Struggling with Exorbitant Rent Hikes

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18th April 2013 15:38 - Housing

 

The latest Buy to Let Index from LSL Property Services has revealed that the cost of renting in London has skyrocketed eight times faster than salaries over the past year, an unprecedented high.

Last month the average monthly rent in London was measured at £1106, representing an increase of as much as 7.9% in just one year. This rise compares with shop price inflation of 2.8% and far overshoots the average rise in earnings which are currently standing at a paltry 1%.

These unbalanced rates mean that on average, £81 more per month is being eaten up in rent in London at a time when salaries have barely budged.

Despite this, Landlords have reported an on-going “red hot” demand for homes across the capital from couples and families who cannot afford to buy. Some of the steepest rent increases have been seen in the “inner ring” of family friendly neighbourhoods, such as Balham, Clapham, Fulham and Shepherds Bush.

This difficult climate is giving rise to an increasing number of London tenants struggling to pay higher rents which eat up a severe chunk of their take-home pay. For every £1000 owed to London landlords in rent last month, almost £100 was unpaid, which is twice the amount of tenant arrears compared to just four months ago.

London Lead Manager at the National Housing Federation, Lizzie Clifford, commented: “Rents will continue to rise in London until we start building enough affordable homes. That won’t happen while this Government spends over £100bn on housing benefit in five years but only £4.5bn on building new homes.”

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