Cheap mortgage rates could be favoured as rents continue to rise

The price of rent in the UK is rising, according to new figures, which could lead some people to seek out cheap mortgage rates and purchase their own property.

Data from LSL Property Services showed that rent paid by private tenants rose by 0.7 per cent in June, with the monthly total going up by £28 in the past year.

"Tenant demand continues to reach ever higher peaks - and there simply isn't enough rental property coming onto the market to match it. In areas like London where competition for rental property is most intense, it's not unheard of for rental properties to be let within a day of coming on to the market," said David Newnes from LSL.

Furthermore, it reported that just 103,000 new homes were built in 2010, despite the UK's population continuing to grow.

Recently, PricewaterhouseCoopers said that house prices are unlikely to recover to peak levels until at least 2020, while there is only a 12 per cent chance that they will rebound to 2007 heights over the next four years.

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2011-07-15 11:47:18 © Moneyextra.com