UK Rents Rise by 2% as London Average Hits £1,143

Almost every region in Britain has seen the cost of renting a home rise in the past 12 months, with a 2% increase recorded across the UK, according to a new survey.

The average UK rent is now £753 a month, up from £738 in July, 2013, according to Newcastle based LSL Property Service. That figure is ratcheted up to an average of £1,143 in the capital where rents increased 2.3% in a year.

However, the South East saw the biggest rise in rent - up by 3.8% to £775 while the North West was the second biggest riser, up 3% to reach £594.

The North East was the only region that saw rent decline: down by 3.8% to £507 on average.

"The rental market is approaching its busiest period yet rent rises remain modest," said David Brown, commercial director of LSL Property Services.

"However, tenants looking to rent a new property this month still need to budget the same as they would have in November. At a time when the UK is facing a serious shortage of homes, and with purchase prices rising steadily, that is an immense achievement for the private rented sector."

A study from the Resolution Foundation shows that 1.6 million British households are spending more than half of their disposable income on rent or mortgage payments.

Laura Gardiner, an analyst at the research establishment, said that the rise in rent presents a major problem for the occupants.

"With house prices and rents rising in some parts of the country, interest rates expected to start to go up and income growth remaining weak, we should be concerned about the ability of this group to absorb additional pressure on their household budgets from higher mortgage payments and rents.

"It is vital that more money is invested in the supply of new housing in order to drive down costs, otherwise we can expect to see a steady rise in the number of households that are 'housing pinched' over the coming years."