Rents in private sector hit record high, says LSL

The rental market has been affected by young adults' ability to buy

The average cost of renting a home privately across England and Wales has reached a record high of £757 a month, according to a survey.

Average rents rose by 2.1% in September compared with the same month a year earlier, LSL Property Services said.

This was a 1.8% increase on August, driven by a 3.3% rise in the south east of England.

The figures come as mortgage lenders reported another strong month in September, after a summer flurry.

'Difficult aspiration'

LSL said that greater demand from tenants was pushing up rental prices.

"Higher rents in almost every region show that, despite government schemes, buying a first home is still a difficult aspiration," said David Newnes, director of LSL, which owns estate agents Reeds Rains and Your Move.

"This is not only down to low salary growth, but also a general shortage of supply - which is the underlying reason why homes are getting more expensive. The long-term trend to renting therefore looks unlikely to change significantly in the near future."

The government has brought forward its Help to Buy scheme, which aims to assist those who can afford mortgage payments, but struggle to raise the necessary deposit to secure a mortgage and purchase a home.

However, critics have said that the scheme could create a housing market bubble, with official statistics suggesting UK house prices are already at a record high.

Figures from the Council of Mortgage Lenders (CML), also published on Friday, showed that mortgage lending for house purchases continued its summer strength.

Gross mortgage lending in the UK stood at £16.2bn in September, slightly below lending of £16.4bn in August, but 41% higher than lending of £11.5bn in September last year.

"Indicators suggest we are witnessing the strongest house purchase performance in five years. House prices too have revived but modestly, aside from a resurgent London market," said CML chief economist Bob Pannell.

The LSL survey suggested that tenants' finances were stretched. Some 8.5% of all rent across England and Wales was late in September, up from 7.8% in August.

However, the annual rise in rental costs was still slower than the general increase in the cost of living, with the Consumer Prices Index measure of inflation at 2.7% in September.