Private rents set to soar as prices rise
Private rents in the region are set to rocket over 50 per cent higher by 2020, rising significantly faster than house prices.
Home Truths 2012, an analysis of England's housing needs by the National Housing Federation, found the future market still looks bleak, with both private rental and house prices likely to move further out reach.
The report warns that the average monthly rent in the East Midlands will rise from £511 to £784, the biggest hike in the country, with the worst affected local areas being prestige homes in Rutland and Harborough.
The cost of privately renting a home has risen by 37 per cent in the past five years and at similar rates in five years will be almost a third higher than current levels.
Business Cards From Only £10.95 Delivered www.myprint-247.co.ukView details
Our heavyweight cards have FREE UV silk coating, FREE next day delivery & VAT included. Choose from 1000's of pre-designed templates or upload your own artwork. Orders dispatched within 24hrs.
Terms: Visit our site for more products: Business Cards, Compliment Slips, Letterheads, Leaflets, Postcards, Posters & much more. All items are free next day delivery. www.myprint-247.co.uk
Contact: 01858 468192
Valid until: Wednesday, May 22 2013
While private rents are likely to be fairly stable through 2013, steep increases are expected from 2015 to 2018 of about six per cent a year as interest rates and house prices increase.
Will Ravenhill, director at Readings Property Group, said: "It is no great surprise that we are likely to see a higher percentage increase across the East Midlands, as Leicestershire rents are more affordable than other parts of the country.
"In the current economic climate, rented accommodation has been a growth sector of the market and rents have risen only slightly because there is more rental property available.
"It is difficult to predict what the picture will be like by 2020, but a six per cent rise year on year between 2015 and 2018 is likely to be tempered by the fact that with house prices rising the market will have improved, with more people wanting to buy than rent.
"In an improved housing market, landlords who have been renting out because they couldn't sell will put their property back on the market and the stock of private rented accommodation will diminish, therefore putting up rents."
The report also found that despite Government efforts to tackle public debt, it is actually spending more on housing benefit.
Nationally, 417,830 more working people, an 86 per cent increase since 2009, are now reliant on housing benefit to help them pay the rising rents on their home.
Leicester City Council Housing benefit claimants have risen from 32,178 in 2010, to 33,635 in 2012, with an estimated 34,365 next year, a rise of over 6.5 per cent.
The National Housing Federation is calling on the Government and the whole housing industry to take a long-term joined up approach to tackle the market difficulties, including the release of publicly owned brownfield land to housing associations so they can build more houses.
Chris Hobson, East Midlands lead manager for the National Housing Federation, said: "It's crunch time for the housing market as thousands of families are already really struggling to afford their home.
"Even working families are becoming more and more reliant on housing benefit to help pay their private rent.
"It's clear that the chronic undersupply of new homes across England and the East Midlands needs to be tackle now, to ease the financial pressure for families and Government."