According to the HomeLet Rental Index, the average cost of renting a property in the UK continues to rise, but in most parts of the country there are sufficient numbers of tenants with higher incomes to sustain the increases.
The average tenant signing a rental agreement in May 2014 had an income 7.2% higher than the average tenant in May 2013. The research shows the incomes of tenants taking on new properties have risen faster than rents in nine of the 12 UK regions covered during the year to May 2014, with the average rent in the UK now standing at £846 a month, or £687 a month outside of Greater London.
The exceptions were Yorkshire & Humber, Northern Ireland and Greater London. In London, however, the average income increase of new tenants has lagged the average increase in rental cost by just 0.6 percentage points.
London aside, rents rose by 2.5 per cent across the UK. Even with the highly distorting effect of London reinstated in the data, the average rent increase came in only marginally ahead of the average rise in incomes of tenants signing new rental agreements.
The figures will reassure buy-to-let landlords who feared that rent rises would price many would-be tenants out of the market.
Martin Totty, Barbon Insurance Group's chief executive, said: "The rental market is in robust shape - while rents are rising, there is not a shortage of tenants who are able to pay, and the return for investors in rental property looks secure. This is good news for tenants and landlords alike. We expect demand for rented accommodation to continue to rise, while investors will no doubt be attracted to the returns on offer in the sector if they are confident in tenants' ability to pay."