Average rents near record levels, as 1 in 3 council tenants fall into arrears


iStock_000001437287_ExtraSmallRecently released figures show average rents are just £1 off a record high, whilst council tenants are struggling to cope, following the introduction of the so-called ‘bedroom tax’.

The buy to let index, compiled by LSL Property Services, shows average rents rose to £743 per month during the month of August, just £1 short of a new high. Compared to July rents were 0.7% higher, but were only up 1.3% on the same time last year; well below the current rate of inflation.

August is always a busy month for letting agents, as students return to university and families look to have their accommodation sorted before the start of the new school year.

Unsurprisingly, London saw the largest increases in average rents, rising by 4.8% over the past year, whilst Yorkshire and the Humber saw rents fall by 1.6%.

‘Bedroom tax’ hitting tenants

Meanwhile, as tenants in the private rental sector struggle to keep up with rising rents, thousands of people hit by the so-called ‘bedroom tax’ have fallen into arrears.

Research from the Trades Union Congress (TUC), who submitted Freedom of Information requests to all councils in Britain, has found that some 50,000 people have fallen into arrears since April 2013.

The ‘bedroom tax’ is the name given to a new Government policy, which removes the “spare room subsidy” from tenants in local authority or housing association property, cutting their housing benefit if they are deemed to have spare bedrooms which are not needed.

The policy, which is believed to have affected around 660,000 people, is designed to encourage such tenants to move to a smaller property, freeing up larger homes for families. However, it has come in for severe criticism from various sources, with Labour leader, Ed Miliband, saying he would abolish the policy if he were to become the next Prime Minister.

The worst affected area of the country was Barrow, which has seen 76% of tenants pushed into arrears since April 2013, when the changes were introduced. Other areas hit badly include parts of Scotland and the North of England.

The TUC figures have been backed up by those from the National Housing Federation (NHF), which found 25% of households affected by the ‘bedroom tax’ have fallen into arrears for the first time. The survey of 38 housing associations in England found that 11,000 of 44,000 tenants had fallen into arrears.

Responding to the figures, David Orr, Chief Executive of the NHF, said:”What more evidence do politicians need that the bedroom tax is an unfair, ill-planned disaster that is hurting our poorest families? There is no other option but to repeal.”