Rents continue to rise despite low inflation and stagnant earnings

Local government is calling for powers to build more homes to help solve the housing crisis

Theresa May has said Britain has a 'housing deficit' (Getty)

Rent increases for tenants across Britain are still far outstripping inflation, new official figures show.

The Office for National Statistics found that private rents grew by 2.4 per cent across Great Britain in the 12 months leading to June 2016.

With consumer price index inflation at 0.5 per cent for the same month, rents are growing much faster than other prices. Flat earnings since 2011 are also exacerbating the affordability crisis.

The picture pained by the ONS stats showed significant variation across Britain, however. In Scotland rents were up by just 0.1 per cent; in England they were up 2.5 per cent.

While Wales saw a small fall of 0.1 per cent over the previous year.

Rent increases were highest in South East England, where they were up 3.4 per cent. Increases were seen in all regions of England.

Yesterday, the Resolution Foundation called for increases to the living wage in London to reflect the spiralling regional costs.

“For many Londoners in particular, that means the higher costs associated with living in private rented accommodation rather owning their own home,” Conor D’Arcy, policy analyst at the Resolution Foundation said.

“Our recommendations to the Living Wage Commission, who are responsible for taking this forward, are designed to ensure that the Living Wage in London and rest of the UK better captures the costs low-income families face today.”

The Local Government Association this morning called for councils to resume their “historic role” by building homes to help solve the housing crisis. During the mid-20th century local authorities built more homes than the private sector; since the 1980s they have built very few.

“Bold new action is needed to solve our housing crisis following the vote to leave the European Union. A renaissance in house building by councils must be at the heart of this,” Peter Box, the LGA’s housing spokesperson said.

“The private sector clearly has an important role to play but the reality is that it cannot build the homes we need on its own, and will likely be further restricted by uncertainties in the months and years ahead.”

On her appointment as Prime Minister Theresa May warned that unless Britain deal with its “housing deficit” it would see “more and more of the country’s money [going] into expensive housing instead of more productive investments that generate more economic growth”.