Tenants in Britain pay the highest rents in western Europe, research indicated today.
It costs an average of £348 a month to rent a room in a shared property in this country – 75 per cent more than in Spain, where rents average only £199 a month, according to Easyroommate.co.uk.
France was the second most expensive country in which to rent a room, at an average of £285 a month – still considerably cheaper than in the UK. In Italy, rents averaged £282 a month.
Despite the UK having the highest average rents, the most expensive city in which to rent was Milan, at an average of £621 a month. London was the second costliest at an average of £551 a month, followed by Rome at £441, Paris at £426 and Nice at £380.
The company blamed the high cost of renting a room in the UK on the lack of mortgage finance, which it said was forcing potential first-time buyers to continue renting, driving up demand.
Steven Jackson of Beatmydebt.com agreed. "It is currently extremely difficult for first time buyers to get onto the property ladder. This means that they have to rent and landlords are aware of this" he said.
"The key to getting onto the property ladder to start saving for a deposit early. Saving is never easy but staying in for a couple nights a week and putting this money into a savings account will make a massive difference" Jackson added.
Mortgage lending in UK contracting
Easyroommate added that banks on the continent were beginning to lend again, with the latest European Mortgage Federation report indicating that total mortgage advances in France had risen by 29.2 per cent during 2009, against 6.2 per cent in Spain and 2.6 per cent in Italy.
However, mortgage lending in this country contracted by 21.4 per cent during the same period.
Jonathan Moore, director of Easyroommate.co.uk, said: “The rent is far higher for British flatsharers than it is for their European counterparts.
“The strength of the pound against the euro plays a part, but that’s not the whole story. Brits are paying more for their accommodation because frustrated first-time buyers are pushing up demand for rental properties.”
Lack of finance
Commentators also blamed the mortgage drought for depressed house prices in England and Wales.
These increased by only 0.1 per cent during June, according to Hometrack. The property intelligence group said that uncertainty in the market was a consequence of the lack of finance as well as the general election and pre-Budget talk of austerity measures.
Meanwhile, the number of new homes coming on to the market continued to increase, rising by 2.9 per cent. The group said the supply of homes for sale had increased at three times the rate of demand since March.
Richard Donnell, director of research at Hometrack, said: “We expect demand for housing to slow further as seasonal factors come into play and households consider the implications of the Budget on their finances and on the economy in general.”
According to the company, the average home now costs £158,900, 2.1 per cent more than in June last year. But only 11 per cent of postcode areas saw a price rise during June, down from 25 per cent in February.