Inflation, as calculated by the Government's Consumer Prices Index, rose by 0.3% over the last 12 months. The question is: what does this mean for tenants living in the South?
Back in November, the Office of National Statistics stated average wages only rose by 1.8% year on year, so when adjusted for inflation, people are supposedly 1.5% better off in 'real' terms.
But how does this shape up for the tenants who are paying ever-increasing rents?
As you can see, the South of England isn't helping tenants maintain or increase their wealth. The 1.5% 'real terms' increase in wealth they experience through inflation and salary increases has been all but wiped out by the rent increases caused by London's power.
So, why are people are still renting? The fact is that renting is simply an easier and cheaper alternative to owning a house. Given that rents are increasing faster than wages and inflation combined, there is such little room for manoeuvre for tenants to save that purchasing a property is not a realistic option for most.
However, there's no need to be disheartened.
The UK has 64.8% homeownership, and most of the homeowners are older. We are seeing a slow reversion back towards to a tenant majority. Can enough people in the South realistically afford property to lower the proportion of tenants in the area? In a word, no!
For now, the sustainable option seems to be to remain a tenant - you save yourself the long-term stress of saving for a home, plus there are no guarantees that you will be better off in the long run if you do end up buying.
Expect the proportion of renters in the South to go in one direction in the coming years: up.