House price in the UK continues to fall in November 2010. Mortgage lenders describe the recovery of mortgage as still “not in sight”. Potential house buyers are more frustrated than ever. According to a survey by LSL Property Services, these buyers are continuing to push up the rental cost of a property in the UK. The average rent kept rising in the past 9 months, and now stands just a few pounds shy of £700/month. Compared to the same month last year, the October 2010 rent is 4.5% higher.
The rental price is rising as potential first-time buyers struggle to get a mortgage and forced to remain renting. The level of demand in house rental is at a 6 year high. This high demand was also thought to be driven by potential buyers waiting as they expect the house prices continue to drop.
Although the rental price is on the increase, buy to let landlords were unable to extend the supply of rental properties because the mortgage drought was making it difficult for them to extend their property portfolios. This is also contributing to the rises.
Rent rises were strongest in the South East of England, but the average rent fell slightly in Yorkshire and the Humber in October 2010.