Monthly rents rise at fastest rate for five years to hit record as charity warns home ownership among young will slide further
- Average monthly rent now at £774 - £4 higher than last October
- Last time annual rents went up this quickly was November 2010
- Shelter says younger generation will struggle to get on property ladder in coming years
Rents across England and Wales have hit a new all-time high of £774 a month according to the latest buy-to-let index from estate agents Your Move and Reeds Rains.
Monthly rental payments were up 4.6 per cent in April compared to a year earlier, marking the fastest annual increase since November 2010.
On a month-by-month basis, rents grew by 0.8 per cent between March and April. It means they have surpassed the record set last October when they peaked at £770 per month before the winter slowdown.
Rental woe: Monthly rents have hit a record high again in April - and Shelter warns younger generation will struggle to get on the property ladder in the coming years
At the same time, a separate report from Shelter is warning the housing shortage will mean the number of 25 to 34 year-olds able to get onto the property ladder will fall drastically in the coming years.
The homelessness charity says if current trends of soaring rents and house prices continue, combined with a lack of homes being built, the number of young adults who own a home could plummet by 50 per cent in just five years.
It would mean less than a fifth of people in this 24-35 age bracket would have bought a home by 2020, compared to 60 per cent a decade ago.
It also says the number of young adults projected to rent in 'expensive and unstable private renting' will increase to 70 per cent from 20 per cent in the coming years. This is the worst case scenario, where fewer than 250,000 homes built annually, Shelter adds.
Campbell Robb, chief of Shelter, said: 'It's hard to fathom that in this day and age, when the solution to our housing crisis is so blatantly clear, millions of renters across are being hung out to dry with no hope of a stable future.
'With sky high rents, instability and homes that are often in poor condition, it's clear that private renting in England is often no place to call home.'
Elsewhere, the monthly buy-to-let index shows London rents hit a record high of £1,204 on average in April after climbing 7.8 per cent in a year.
In Wales it is a different story, with rents falling 2.8 per cent annually to slip to £553 a month typically.
The East recorded the strongest annual increase in rents, with a 12.5 per cent uplift taking average prices there to £810.
Adrian Gill, director of Your Move and Reeds Rains, said: 'Rents are going skywards and still accelerating.
He said the upward momentum is being fuelled by a shortage of properties for tenants to choose from and signs of renewed wage growth.
He adds: 'People have more money in their pockets, but we're in danger of seeing that recovery squandered away on a housing shortage.'
Despite the increase in rents, the report suggests that tenants' finances are improving. In April, seven per cent of all rent was in arrears, down from 7.4 per cent in March.
However, the report also said there is some evidence seen by Your Move and Reeds Rains to suggest that the number of tenants in severe arrears has increased.
Adrian warns: 'On average, the nation's finances are improving... but at the same time a smaller minority are still struggling to get their living costs under control.'
The monthly buy-to-let index has tracked the market since January 2008 and is based on rents achieved on around 20,000 properties across England and Wales.
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