Rent on the average UK one-bed flat has now surpassed £1,000 per month
Have warnings over the government's attempts to reduce second home buying just come to pass? New figures have suggested the average UK one-bed flat now costs tenants more than £1,000 a month. Ouch.
The figures, by Landbay, showed the average UK one-bed hit £1,010 a month in August, 67 per cent of the average disposable income of £1,467. In the capital, that was even higher, at £1,461 a month – almost three-quarters of the average disposable income of £1,967.
To be fair, the index suggested rental price increases are falling – in August they edged up just 0.1 per cent, and 1.7 per cent in the year, compared with wage growth of 2.4 per cent. That echoes figures published last week by HomeLet, which showed rental price growth was slowing.
But it may nevertheless be an indication the government's decision to hike stamp duty on buy-to-let properties hasn't done much to help renters.
Stamp duty vs rental prices
In May the Association of Residential Letting Agents (Arla) warned the supply of rental properties had fallen five per cent year-on-year, suggesting rental prices were likely to rise as competition for homes heated up.
Today Landbay suggested the problem was beginning to hit first-time buyers.
"With a rapidly growing population and a chronic undersupply of new houses, property prices are growing even further out of reach for aspiring homeowners," said John Goodall, its chief executive.
"With rents climbing too, even in the face of Brexit uncertainty, tenants saving up for a house face a triple challenge in trying to catch up with the pace of house price inflation, with more and more of their income spent on rent, and record low interest rates limiting their ability to save money."
The end of the amateur landlord?
Yesterday Britain's biggest buy-to-let investors admitted they had sold nearly half their £250m portfolio.
“If you were an amateur landlord in [the 1990s], as long as you could spell your name, you would get a mortgage," said Fergus Wilson.
"No one appeared to check anything. I wouldn’t say it is impossible but it is much tougher. Some [banks] are offering loan-to-value of only 60 per cent."