Last year, while wages remained static, private
rents rose by an average of nearly 3 per cent, or £300 a year,
according to an analysis of
Valuation Office data published by Shelter this week.
But there is considerable variation in the rate of increase from
area to area, with increases over 10 per cent in parts of London
and the South East, and topping 14 per cent in parts of
This contradicts the government's assurances that benefit cuts
would slow the rate of rent increases, but it is hard to see why
anyone would find these credible anyway, since most private tenants
are not getting help with their rent. The reason why market rents
are rising is a simple matter of supply and demand.
There is a shortage of accommodation, particularly in those areas
where the local economy is strong and jobs are available; landlords
can get away with charging more and tenants have little alternative
but to pay.
Supply of new homes, whether for sale or for social - or rather
affordable - rent, remains at a shamefully low level. And in case
anyone needed reminding of this, the NHBC also published figures this
week, which show a 9 per cent fall in registrations of new housing,
from 114,930 to 104,510, while completions remained flat at around
112,000. The cause was a sharp fall in public sector registrations,
from 38,680 to 26,390, while private registrations remained
It would be foolish to expect the upward drift of private rents to
do anything but continue or accelerate, particularly if, as seems
likely, economic recovery when it comes continues to favour the
already prosperous South East.
The only factors likely to head off rent inflation are either a
significant increase in the supply of rented housing - public or
private - or a major initiative to ease access to home ownership.
Ironically, in most areas average mortgage repayments are less than
market rents for the same properties.
While the government is dabbling with initiatives to promote new
building for private rent and help first time buyers, it is not
taking action on anything like the necessary scale. Time for Plan