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Rent costs rising twice as fast as wages


The average cost of renting a home in the UK is rising twice as fast as wages, as demand for properties outstrips supply in ever more competitive market.

The cost has now risen to £753 a month, up 1.6pc year-on-year from November 2012, while over the same period wages have risen by just 0.8pc and stand at an average of £1,942 before tax.

While this is positive news for landlords, it does mean that further strains are being put on tenants’ finances. Earlier in the month, we told how household expenses have now overtaken transport costs as the primary family expenditure for the first time in history, with rises in the cost of renting, as well as household energy, cited as the main reasons behind this.

From a landlord’s point of view, this means ever higher possible returns on their investment. Average returns this year have been 8.9pc, which is £8,243 from rental income, but this has been boosted by a strengthening market which has also added £6,349 onto the average property in capital gains, according to LSL Property Services.

The company also said that, if rent continues to rise at the same level as over the last three months, the total annual return would rise to 10.5pc over the next 12 months, which would represent £17,295 for the average property.

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