Business

Rental costs fell in December, says LSL

House keys
Image caption The number people looking to buy has started to increase

The cost of renting a home in England and Wales fell by 1% in December compared with the previous month, a survey suggests.

The annual rise in the costs for tenants also slowed to 1.5%, according to LSL Property Services.

Seven out of 10 regions saw rents fall on a monthly basis, with the sharpest fall in the south east of England (down 2%).

However, the south east remains one of the most expensive areas.

Arrears

London was the most expensive, with an average rent of £1,131 a month, compared with an average in England and Wales of £745.

Despite the falling cost of rent, a growing proportion of rent was unpaid or late in December. This represented 9.7% of all rent, compared with 6.6% in November.

"The culprit is wages, which haven't kept pace with the rising cost of living for years," said David Newnes, director of LSL.

The rental market has included a number of frustrated would-be buyers since the financial crisis, with many having to spend time as tenants while trying to raise money for a deposit.

Government schemes and less stringent requirements from lenders have meant that some of these people have now been able to secure mortgages and get on the property ladder.

Aaron Strutt, of mortgage brokers Trinity Financial, said mortgage lenders were also keen to attract more landlords as buy-to-let customers.

"Many of the banks and building societies are planning to ramp up their buy-to-let lending this year and some of the rates are not that much higher than the residential deals," he said.

A more comprehensive quarterly rental index from the Office for National Statistics will be published later in January.

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