The latest report from Rightmove indicates a higher number of tenants believe they will be paying more for rent twelve months from now compared with only 53% last year.  Six out of every ten now believe that in one year’s time rent will go up.  The rental market is always heavily influenced by what happens on the house sales side.  Demand for housing remains steady, although gaining entrance to the property ladder is still quite challenging due to the high amount of deposit required for a house is still rising.  Demand for rental property continues to outpace supply and that continues to put pressure on rental prices.  London and the SouthEast continue to experience the greatest amount of demand for rental property.

The national average for more than half of all income being spent toward rental accommodation is 26%.  London and the SouthEast remain above that at 29% and 31%, respectively.  This has led to more households feeling the pinch as far as making it each month financially.

Director of Rightmove, Miles Shipside, recently commented on the attitude of the majority on rents in the near future, saying: “The view from the majority of tenants across the country is that rents are only likely to go one way, and that’s up.”

The digressing belief from many in the market for a house over renting is that spending more on rent only means waiting longer to buy, due to the extra funds which are not able to be saved each month.

Shipside continued: “For the most attractive and immediate rental returns, the north wins. Investors in London and its surrounds may eventually find that the streets are paved with gold, but they’ll have to wait and see what happens to capital values just to find out. The statistics also show that more experienced investors are interested in securing a steady northern-based return now rather than a potential gain some years hence further south. If you need to supplement your pension income stream in the near future, immediate returns for a lower capital outlay have a strong appeal. Lower entry costs further north also mean an investor can buy more property units, spreading the risk rather than perhaps having all their eggs in one basket with a higher value single investment further south”.