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Rental Costs to Increase in the UK in 2013


Renting a property in the UK will be more expensive in 2013 and the percentage rise is likely to be twice that of the increased cost of buying a home, the Royal Institute of Chartered Surveyors (RICS) warned recently. It has estimated that the percentage rise in house prices will be around 2% but renters will see their monthly outgoings increase by 4%.

The growth in house prices will be mostly driven by London, the North West and the South East. The latest figures suggest that the average cost of a home in the UK stands currently at £161,000 against a recent high in 2007 of £200,000. Simon Rubinsohn, the chief economist for the RICS said, ‘The average house price in the UK looks set to rise by a further two percent next year, despite the uncertain outlook for the economy. More positively, the amount of sales going through should also see an increase across the country, climbing to its best level since 2007, as the Funding for Lending scheme helps boost the availability of mortgage finance. Even with the Funding for Lending scheme and some other government policies beginning to be felt in the mortgage market, many first-time buyers will continue to find it difficult to secure a sufficiently large loan to take an initial step on the housing market.’

There is good news in that home repossessions are set to fall to less than 35,000 for the first time since 2007 and also that the number of housing transactions are likely to rise in 2013 compared to 2012. This must be set against the rise in rents, however, which will reach an average monthly outgoing of £745 in 2013, with the London average being £1,100. The RICS has called for the government to encourage more new builds to consolidate the first signs of recovery in the housing market.

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