Rising rents outpace pay as private rental market 'remains in good shape' despite Brexit

Housing costs continue to grow more quickly than wages, though the supply of rental property rises.

UK housing — Rents are underpinned by a housing shortage in areas of the country, particularly London and the south-east of England iStock

The rising cost of private rents continues to outpace pay growth in Great Britain as demand for rental housing remains "at high levels".

In the year to August 2016, private rental prices in Great Britain grew by 2.3%, said the Office for National Statistics (ONS). Rents grew by 2.4% in England, 0.1% in Wales and were unchanged in Scotland over the same period. Other ONS figures show pay rose by 2.1%, excluding bonuses, in Great Britain over the year to July.

Separate data from the Association of Residential Letting Agents (ARLA) shows there was an average of 37 prospective tenants per branch in August 2016, up from 36 in July and the same month a year before.

But the number of properties managed by each letting agent hit 178 on average in August, a 3% year-on-year increase. It follows a surge in buy-to-let investment ahead of a stamp duty hike in April, bringing a greater supply of rental properties to the market, though an overall housing shortage in England continues to inflate prices.

"Although Brexit painted a temporary picture of uncertainty for tenants and landlords, our findings show that the market remains in good shape," said David Cox, managing director of ARLA. "We're not seeing anything across supply or demand that is out of the ordinary, and while demand is at high levels, this is being matched with a decent volume of properties on the rental market."

UK Housing