AN EXTRA one million new homes are needed for Britain’s rental sector, a survey revealed this morning, as a shortage of properties sends costs rocketing for tenants.
Rents have shot up by an average of 5.2 per cent over the last year, with Savills expecting an eye-watering 20 per cent spike over the next five years.
Tenants in London and the south east are the most stretched by their rental bills. A typical two-bed property in the capital costs 53 per cent of a local person’s average earnings – well over the UK-wide average of 31 per cent.
“Proximity to London tends to equate to higher rents, with an average of £10,300 for a two bed property in the south east compared to £6,170 in the north east,” the report added. Rents in London range from £9,980 per year in Bexley to an astonishing £48,230 in Kensington and Chelsea.
Difficulties in securing a mortgage have resulted in more people staying in the rental sector. Rightmove, which co-authored the report, estimates that these “trapped renters” make up over half of the UK rental sector.
More than a quarter of this demographic are aged over 40, it said.
“By 2016 demand for private rented accommodation could reach one in five households, resulting in a requirement for an additional 1.1m rental homes,” the report said.
“In London, private renting already accounts for 27 per cent of all homes (900,000), having overtaken social renting in 2010, which now accounts for just 24 per cent of tenure (783,000 homes),” its calculations showed.