I have recently been asked to talk to the BBC about their latest report from Shelter about tenants being 'trapped' in rental properties because they cannot afford to buy.  The report from Shelter states that rents have increased on average by £150 per year and by 2.6% in the West Midlands region therefore increasing the burden on tenants. The report says that Warwick is tipping the scales nationwide due to local investment with average rents up by a staggering 11% (to £799) over the last year. And in my own home town of Wolverhampton rents increased by 5.2%, with Shelter stating this leaves many tenants with as little as £50 to spare each month. The question is that if these tenants have so little cash available when paying rent, and if they could actually get hold of a deposit to buy: should they?

Rent increases are just the result of market forces (supply and demand) and for there to have been an average rent increase of 11% in a given area, there must be some regional forces at play, which there has been apparently (around Warwick) with the recent building of the Jaguar Rover plant increasing housing demand as more people move into the area to work. Normally rents are pretty stable with a gentle rise of 2-3% being more what you would normally expect under usual circumstances.

However, rental increases will be affected by the fact that we are also seeing more tenants looking for accommodation than ever before. This is due to many factors of course with people staying single longer and increased divorce rates creating a need for more housing units, plus the movement of jobs require people to move to where the work is.  Add in the fact that councils and social housing providers are not building many new homes and more frequently we are seeing people renting out of choice and not wanting the 'burden' or the risk of dramatic mortgage rate increases.