Average rent rises moderate

Whilst this level of growth for new tenancies continues to outstrip the rate of inflation, this is much lower than the peaks seen just a few months ago when rents were up by over 8%.

The latest HomeLet Rental Index is published alongside new research into tenants’ views about the rental market, conducted by HomeLet in October 2015.  The research reveals that a large proportion of tenants are renting their homes for the long term and that they value relationships of trust with landlords and letting agents.

In HomeLet’s nationwide survey of almost 15,000 tenants, almost two-thirds (64%) said they planned to continue renting for a year or longer, and 90% said they were happy with their landlord.

HomeLet’s survey found that a large proportion of tenants (71%) would ideally prefer to buy a home, however 66% said they saw saving for a deposit as the biggest barrier preventing them from doing so.

The slowing pace of rent rises recorded by October’s HomeLet Rental Index may be welcomed by those planning to sign new tenancies in the months ahead, though HomeLet’s survey also reveals a broad range of factors are important to tenants when choosing a property. While 87% of tenants indicated rental cost is an important factor, both attractiveness of the surrounding area (75%) and a low crime rate (70%) also ranked highly.

October’s HomeLet Rental Index shows that the gap between the pace of annual rent rises in the capital (7.5%) and the rest of the UK (3.5%) has widened in recent months, after converging over the summer. On average London tenants paid £1,560pcm, which is over £800 more per month that the rest of the UK.          

For the second month running, the HomeLet Rental Index reveals that rents are now rising most quickly in Scotland, where new tenancies over the three months to October 2015 cost 9.0% more than in the same period of 2014.

While the pace of rent rises has slowed over the autumn, rent inflation has increased in nine out of 12 regions of the country – the exceptions are the North West, where rents on new tenancies over the three months to October were 4.9% down on last year, Northern Ireland (2.1% down) and East Anglia (1.2% down).

Martin Totty, Barbon Insurance Group’s Chief Executive Officer, said: “Our survey showed that many tenants ultimately aspire to own their own home, but that just over half of them aren’t actively saving for a deposit yet. 66% of those questioned said that a deposit wasn’t affordable for them.

However, the positive news is that almost nine out of 10 tenants told us that they were happy with the standard of their current rented property; and the majority of tenants told us they were happy with the service provided by their landlord or letting agent.
 
Whilst we are seeing upward pressure on the rental market it’s important that the sector continues to drive professional standards forwards for mutual benefit of tenants, landlords and letting agents.”

HomeLet Rental Index regional rent price figures for the three months to October 2015