Mortgage drought as rents hit £1000 average in capital

A survey of 18,000 flats in London showed that rents now average over £1,000 a month.

LSL Property Services found that there had been a 6.6% rise in the capital last year, and a 4% percent rise across England and Wales as more people than ever are now finding it impossible to buy a place of their own.

Banks and building societies are reluctant to lend, while house prices are holding firm in London. Scottish Widows has predicted that once tuition fees have added to graduate debts, the average age of first time buyers will rise to 44. In the sixties it was 27.

The news means buy to let landlords are raking in the cash. David Newnes, managing director of LSL said: 'In the last two years, average rents have risen by more than £50 a month.

'With significant improvement in the number of buyers able to secure a mortgage unlikely in the foreseeable future, competition for rental accommodation will not drop and further rent rises remain on the cards. Recent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers.'

And for many even renting is proving too expensive. Jonathan Moore, director of Easyroommate.co.uk, said: 'Lenders’ unrealistic deposit requirements, combined with hefty house prices have left the private rented sector groaning under the strain of demand from frustrated first-time buyers.

'Such strong competition for limited accommodation is taking its toll on rents, and they will continue to climb for as long as the mortgage market remains at a standstill. As rents rise, driving down affordability in the private rented sector, many renters are cutting costs by turning to flatshares.'

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