Increasing Rent Prices Prove Too Much For UK Pay Packet

Peter Mindenhall, researcher at IPINGlobal.com, has claimed that the increases in rental prices throughout the UK cannot be met with the current average income.

He continued, saying that the situation is tricky for those who are letting out their properties, as many of those people they are renting to are unable to make confident monthly rental commitments. This is a result of salary freezes and increasing unemployment.

Regardless of the mortgage industry exclaiming that buy to let is on the up, Mr Mindenhall suggested that this is not strictly true, as such exclamations are supported on the sector’s statistical findings, instead showing that the buy to let market is simply supporting house prices.

These statements come in response to a report published by LSL Property Services that revealed that rental prices have reached an all time high, reaching £700 per month. The findings also showed that tenant arrears had decreased by 18%, with the overall amount of late or unpaid rent going from 11.5% to 9.3%. However, the expert explained that such a development is unlikely to persist as rents continue to rise.

Mr Mindenhall continued: "As interest rates rise, we will likely see a rise in defaults because the money at a consumer level simply is not there to support the need to raise rental prices, due to rising unemployment and lack of wage increases."

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