Private sector rents rise in line with wages

Private sector rents rise in line with wages

Private rental price increases have accelerated modestly, in line with earnings across England, according to a new report from the National Audit Office.

But while the cost of renting in the private sector has largely followed changes in earnings, rents in the social sector have increased faster than wages, the figures show.

The exception to this is in London, where rents are rising much faster as a consequence of the supply-demand imbalance in the capital.

In its analysis on the state of the housing market yesterday, the Royal Institution of Chartered Surveyors warned that “rents are being squeezed higher due to demand consistently running ahead of supplyâ€.

Commenting, RLA policy director, David Smith, said: “Today's findings from the National Audit Office will surprise those who have falsely sought to argue that landlords are profiteering. The question must surely now be why the heavily subsidised social rented sector is seeing its rents increasing so much more than earnings.

“We cannot afford to be complacent. Forthcoming changes to mortgage interest relief, due to be rolled out from April will serve only to place upwards pressure on market rents, stifling the supply of homes to rent and reducing choice for tenants.

“In the end, those who will suffer will be tenants unable to save for a house of their own, and the many vulnerable people, such as the homeless, who rely so much on the sector to provide a home for them.â€

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