There is plenty of good news in the rental sector right now. Tenant demand is strong and shows little sign of waning. With demand strong and supply less fluid, rents have continued to increase in most of Britain. In London the average monthly rent is £1000, elsewhere it weighs in at £700.
Good news you might think. But there is a downside. Pundits are reporting that rising rents are at risk of becoming unaffordable to average income, working families. According to Shelter, in nearly 55% of the country, rents for two bedroom houses account for 1/3 of average monthly take home pay.
The problem is more acute in London. In 22 London boroughs, renting a home accounts for more than 50% of household earnings.
It's obvious that rents cannot continue to grow at the rate they have for the past few years, but how high can they go? With tenant demand ever growing, it would seem we haven't seen the end of the bubble yet.