Record rents of greater than £1,000 a month and the typical house value breaking by way of the £260,000 barrier are placing added pressure on households already going through a value of dwelling disaster.
Data from the tenant referencing company HomeLet confirmed the typical UK hire rose to £1,069 a month in February, up 8.6% on the identical month of final 12 months when the determine stood at £984.
The date, which relies on lately agreed tenancies, exhibits large variation across the UK however within the south-east and the east of England, month-to-month rents are above £1,000 and in Greater London the typical was up by 11.8% 12 months on 12 months, at £1,757. In the south-west, tenants paid a median of £999 a month.
Separate figures from the mortgage lender Nationwide confirmed house prices additionally hit a excessive throughout the month, with the typical breaking through the £260,000 mark for the primary time.
The constructing society mentioned house prices have gone up by virtually £30,000 over the previous 12 months – the largest money improve within the 30 years it has been reporting on the market.
The value of shopping for a house is now equal to 6.7 occasions common earnings – up from 5.8 in 2019.
Although mortgage charges have been edging up, they’re nonetheless near historic lows. However, rising inflation may imply additional Bank of England base fee rises are on the playing cards in coming months, which means increased prices for these on variable fee mortgages.
Some debtors have already seen their month-to-month prices go up in keeping with December’s base fee rise, and face additional will increase because of the January rise.
Osama Bhutta, the campaigns director on the charity Shelter, sid housing prices are most individuals’s largest month-to-month expense, with personal rents specifically taking an enormous chunk out of take-home pay.
The authorities’s most up-to-date English Housing Survey discovered that in 2020-21, personal renters had been spending a median of 31% of their family earnings on hire.
“When other bills and essential costs shoot up, it piles more pressure on to households whose finances are already stretched too thin,” Bhutta mentioned.
“Our emergency helpline is taking call after call from people who just don’t know how they’re going to keep paying sky-high rents and make ends meet. People on lower incomes are being squeezed so hard they’ve got nothing left, and when people can’t afford their rent they face eviction and the very real threat of homelessness.”
Sarah Coles, the senior private finance analyst at Hargreaves Lansdown, mentioned rising house prices would add to the price of dwelling disaster.
“Some households are already borrowing more to make ends meet, and those with a bit more wriggle room in their budget are squirrelling money away to last them through more difficult times,” she mentioned.
“As new and dramatically higher energy bills hit the mat, there will come a point when stretching your finances to get on to the property ladder feels like a step too far.”