Warning to Boris: don’t hurt rentals in push for home ownership

A prominent industry supplier is warning the government not to damage the private rental sector in its push to promote ever-more home ownership.

The censure comes from Matthew Carter, head of marketing for HomeLet and Let Alliance, in his comments on the latest rental sector figures.

He says: “Housing follows the same fundamental laws of economics as other goods that consumers need. Ultimately demand, coupled with lower stock levels for certain types of property, are driving up rental values. The concern is that we’re at a point where there are some areas with exceptionally high demand.  

“Landlords and the lettings market have faced a continued raft of changes and legislation; the government needs to carefully consider how any future policy might impact the 4.5m households in the private rented sector. 

“The government’s push on homeownership shouldn’t be done to the detriment of an industry that plays a critical role in UK housing.”

The latest HomeLet index prompting the comments shows average rent in the UK has hit another record high of £1,061, up 7.5 per cent on the same time last year, and up 0.8 per cent in just one month.

London continues to march towards normality, with another price rise. 

An annual increase of 6.4 per cent in the capital has taken the average price to £1,752 pcm; the monthly jump of 2.3 per cent is the biggest in the country. 

 Excluding London, the average UK rent price is up to £891 pcm, up 7.6 per cent year-on-year.  

The South West of England has seen a significant monthly drop in rent price, with the average rent now at £971, down 3.5 per cent compared to last month. 

Elsewhere, every single region has seen a year-on-year price rise, with Wales (12.9 per cent) and Scotland (10.8 per cent) seeing the most significant annual increases. 

Carter continues: “UK rents are up by 9.7 per cent on pre-pandemic levels, but most of the increases have happened this year. 

“At first, we saw rents outside London surge whilst prices in the capital dipped, but we’re now seeing rents in London rise much more rapidly, fuelling the record rental levels we see across the country. 

“Typically, rental prices rise in line with inflation and wage growth; that’s something we’ve continued to see. Despite record rents, tenants moving home spend a similar percentage of their income on their monthly rent. 

“In September, the average household spent 29.6 per cent of their gross income on rent, compared with 30.9 per cent in September 2019, before the pandemic.”