This increase was 2.8% in England, 1.6% in Scotland and 0.5% in Wales across the 12 months period to September 2015 with London witnessing the highest increase in rental prices, growing by 4.1% over the year to September 2015, with all other English regions seeing a rise also.
Andrew Bridges, managing director of London estate agents Stirling Ackroyd, comments: “Britain’s rental market is being powered by London, as the capital’s allure continues to draw graduates and professionals from around the country.
Supply remains an unaddressed issue – more apartments are needed rapidly to combat spiralling demand. And as renting becomes the norm for all ages, the result of this mismatch is felt clearly in average rents as much as property prices. When people say the UK needs more homes, the true meaning is usually that London needs more homes.”
Stuart Law, CEO of Assetz for Investors, comments on the ONS Index of Private Housing Rental Prices: “This quarter’s ONS private rental prices index indicates that buy-to-let landlords are likely to prosper in the year ahead, despite the likely interest rate hike in the new year. With rental prices growing on average by 2.7% in the year to September and on-going demand for homes creating strong occupancy levels, landlords are likely to benefit from even faster rental price rises next year according to the upward ONS trends.
The rental market in the UK has shown signs of growing strength in this third quarter, with rental prices in London experiencing the biggest increase. With many young professionals seeking a base close to their place of work and the amenities of central London, renting is the most attractive option. It is now a positive lifestyle choice for an increasing number of people. However, the prolific lack of both supply and variety of homes means competition from those searching for the ideal property is fierce, allowing for rental prices to increase significantly.
The North West region, which covers areas such as Liverpool and Manchester, also saw a greater increase this quarter, with the average rental price growing by 0.7% in the 12 months to September. With Chancellor George Osborne’s devolution deals now covering both Manchester and Sheffield, with strategies in place to extend his Northern Powerhouse plans to the North East and Tees Valley regions, the north is set to experience a significant boost in local growth and an increased demand for housing as job creation and regeneration takes hold. This is likely to increase rental prices in the region further, which will see buy-to-let investors favouring these parts over the next few years.”
