Private rents still rising says letting agent.

" Private property rents continue to rise" says Clare Price of Prime Surrey Lets

This reflects an ever rising demand for rented accommodation and a lack of good quality stock becoming available to potential tenants.

Official government figures suggest that private rentals have soared by 55% over the past six years. This reflects the struggle many potential homebuyers face when trying to buy their first home.

As the current economic conditions bite, more people are living in rental properties and the UK’s housing market is radically changing. Far more new households set up in rental accommodation, a result of first time buyers being unable to raise deposits or be granted a mortgage.

For the first time in 10 years, according to government figures , there has been a net movement away from owner occupation into the private rented sector.

A report from the National Centre for Social Research found that a staggering 64% of those in rented believe they have no hope of ever buying a home.

Another key factor in the rise of the rented sector is the stagnant property market. With house prices flat or falling, potential upsizers have insufficient equity to climb the property ladder.

According to Prime Surrey Lets , the main reasons why private rents continue to rise are these :

• demand from prospective tenants outstripping supply of properties to rent

• Inability of first time buyers to raise large deposits or a mortgage on a property

• Lack of houses being built. In 2010 only 103,000 homes built whilst the UK population grows strongly.

• A stagnant owner occupied housing market

• Buy to let mortgages harder to obtain thereby stifling supply

Without any positive outlook in terms of building more houses or making mortgages easier to obtain, rents in the private sector are set to rise even further.

An interesting side issue relates to tenant arrears. Arrears are falling as landlords adopt a harder line with tenants in payment difficulties. Landlords look to replace them in expectation of even higher rental income as rents rise quickly.

In the UK , rents are rising fastest in London and the south east. In London average monthly rents are around £1000.

There is more pressure on rents as landlords are asked to provide extras such as double glazing, broadband and satellite services. After all renting in a rapidly changing housing market is now a long term option and tenants want a nice space to live in, and why not , there may be paying more in rent than they would if they could get a mortgage.