Cost of renting soars as house prices slow

The gulf between the cost of buying or renting a home continues to widen with average rental prices climbing at a “near-record rate” even as house price growth slows, according to latest data from the Office for National Statistics.
Across the UK, property values increased by an average of 2.2 per cent in the 12 months to July to reach £290,000, slowing from a 2.7 per cent increase in the year to June.
Average house prices in England increased to £306,000 (1.6 per cent), in Wales to £218,000 (2 per cent), and in Scotland to £199,000 (6 per cent). In London, prices declined by 0.4 per cent to £521,000.
Meanwhile, private rents rose by an average of 8.4 per cent annually in August, with tenants typically paying £1,286 per month. In London, rents rose by 9.6 per cent in the year.
Aimee North, of the ONS, said: “Rental prices continue to climb at a near-record rate, although the pace of the increase has slowed slightly. London again saw the fastest growth in rents, with the slowest rise in southwest England.”
The official data came as analysis from Rightmove, the property search website, named St Albans in Hertfordshire, as the most expensive place to rent outside London. It found that the average monthly rent in the city was £2,307 a month, more than two-thirds above the UK average.
The university cities of Oxford and Cambridge ran a close second, with tenants paying £2,237 and £2,072 a month respectively.
By contrast Carlisle, in Cumbria, northwest England, was found to have the lowest rents in Britain at an average of £791 per calendar month.
Tim Bannister, a director at Rightmove, said: “The rental divide across Great Britain is clear, with an average difference of just over £1,500 between the most expensive and cheapest cities.
“Many of these cities have seen rental growth of over 40 per cent over the past five years, meaning it’s likely to be a significant consideration when students are thinking about where to study, and those who have already graduated working out if they can afford to stay in that city and find a job,” he added.
The average monthly rent outside London reached a record high of £1,349 in August, 5 per cent higher than the same period last year. Rental demand has grown as buying property becomes less affordable, while a lack of properties available for tenants has also increased rents.