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Renting 'cheaper in real terms'
Average annual rent increases first dropped below inflation in June 2013 and had remained beneath this level ever since, experts said
Private sector rents have been getting cheaper in real terms throughout the last year as stability returns to the market, a major lettings network has reported.
A 0.6% month-on month increase in average rents took the typical amount paid by tenants across England and Wales to £745 a month in May, accelerating from no monthly change in April, according to LSL Property Sevices, which owns national chains Your Move and Reeds Rains.
But despite the pick-up in costs, private sector rents were 1.1% or £8 a month higher than they were a year ago, which is below the Consumer Prices Index (CPI) rate of inflation of 1.5% in May.
LSL said that average annual rent increases first dropped below inflation in June 2013 and had remained beneath this level ever since.
The fall in the pace of rent increases had coincided with a period which had seen the launch of the Help to Buy mortgage support scheme to make it easier for aspiring first-time buyers to make the jump out of the rental sector and onto the housing ladder.
Despite signs that activity in the housing market was cooling off slightly, the Council of Mortgage Lenders (CML) had said mortgage lending was still running at "substantially" higher levels than a year ago.
LSL's figures showed that the pace of annual rental inflation in May ranged from a 3.9% increase in the South West, which pushed average monthly rents there to £657, to a 3.6% fall in the North East, with typical rents there standing at £513.
Rents in London had also risen at a below-inflation pace over the last year, with a 1% annual increase taking the average monthly rent in the English capital to £1,124.
In Wales, rents had edged up at a faster annual rate of 1.8%, lifting average monthly rents there to £572.
The report, which is based on rents achieved on around 20,000 properties, found that tenant arrears also saw a further improvement in May, with the proportion of rents which were late falling to 7%, from 7.4% in April.
David Newnes, director of LSL, said: "Stability has returned to the rental market.
"Private renting is becoming cheaper in real terms.
"May's latest sub-inflation rent rises will help over nine million tenants."
Government figures released yesterday sparked concerns about households living in the private rental sector.
The data showed that some 13,650 households in England were accepted by their local authority as homeless during the financial year 2013/14 after their landlord ended their tenancy, marking a 14% year-on-year increase and the highest annual figure since 2004/05.
Housing charity Shelter said yesterday that "unstable" short-term tenancies and "revenge evictions", which are carried out after tenants complain to landlords about problems such as a leaking roof or damp, were leaving families struggling to afford anywhere to live.
Housing Minister Kris Hopkins said: "I welcome these figures that show rents are falling in real terms for private tenants. It shows our long-term economic plan is working, but we want a bigger and better private rented sector.
"That's why we're enabling better rental deals with our new How to Rent guide, without introducing unnecessary red tape which would force up rents and reduce choice and quality for tenants.
"We've also introduced the £1 billion build to rent fund, which is on track to have started work on up to 10,000 homes by 2015, and made £10 billion of Government-backed guarantees available to encourage more investment in the sector."