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Cost of new tenancies continue to rise

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Cost of new tenancies continue to rise

The latest data from HomeLet has shown that the average rental agreement outside the capital during the three months to February 2016 cost 4.8% more than in the same period last year.

While that rate of appreciation was down on the 5.5% seen over the three months to January, rents on new tenancies continue to rise much more quickly than inflation in most parts of the country.
 
HomeLet’s research also shows that as rents have risen in recent years, the number of new tenancies signed by a single tenant has fallen. Last year, single tenants accounted for just 33% of new tenancies on rental properties, down from 67% in 2008. By contrast, the proportion of new tenancies signed by two tenants rose from 28% to 52% over the same period. New tenancies signed by three or more tenants have risen from 5% to 15% of the market.
 
This trend may in part reflect the increasing number of families moving into the private rental sector as house prices have become less affordable and as people have pursued greater flexibility. The latest data from the Office for National Statistics reveals the number of privately rented homes let to families with dependent children has risen from 30% to 37% over the past 10 years.
 
The increasing number of tenants per property may also suggest people are more inclined to rent together after a sustained period in which rents have risen more quickly than general inflation: HomeLet’s data shows the proportion of new tenancies taken on by three tenants rose from 3% in 2008 to 8% by last year. Homes with four or more tenants accounted for 7% of the market last year, up from 2% in 2008.


The higher rents recorded by the HomeLet Rental Index mean the average rent on new tenancies signed during the three months to February 2016 was £1,521 per month in the capital - and £744 per month across the rest of the UK.
 
Rent rises in the London market are once again increasing, though remain below the double-digit increases seen last year: the average rent agreed on a tenancy in Greater London over the three months to February was 7.7% higher than 12 months ago, up from annual growth of 6.2% during the previous three-month period.
 
The Index shows rents on new tenancies rose in 10 out of 12 regions in the UK on an annual basis over the three months to February 2016. The exceptions were the North West of England, where rents dipped by 3.2% from £657 per month last year to £636 per month, and the North East of England, where rents now stand at £519 per month, 2.6% lower than a year ago.
 
Martin Totty, Barbon Insurance Group’s Chief Executive Officer, said: “We’re continuing to see the effect of the imbalance between demand and supply in the private rental market: average rents are still rising and while we are not seeing the double-digit increases recorded in some areas of the country during the summer of last year, the cost of a new tenancy continues to rise more quickly than general inflation.
 
Our data on the number of tenants in each property gives a fascinating insight into the changing nature of the private rental market. Landlords are letting out homes to many more families, with rental property representing an increasingly important alternative to owner occupation; we’re also seeing people manage with higher rents by meeting the costs as joint tenants.”

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Latest Comments

Paul
Paul 25 May 2016

Estate agents are pathetic when it comes to fees. They have this 'I had to do it at 1% because that's what the others were quoting' mentality. We are the most expensive agents in our area, charging double...

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HMO Midlands Landlady
HMO Midlands Landlady 24 May 2016

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CommercialTrust 20 May 2016

With the bulk of the market controlled by large developers, profit rather than necessity determine the pace at which homes are built. There are hundreds of thousands of plots that have planning permission...

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Johna
Johna 20 May 2016

"Easier said than done" is what I would say. Of course, it would be more than great to have more in quality and affordability, but I do not trust talk anymore.. What is said is not what is happening.

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Johna
Johna 20 May 2016

in my humble opinion being fair like THE most important! I myself have had bad experience with unfair landlords... not to mention that I know how to do a proper end of tenancy cleaning since I am a fantastic...

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richardrawlings
richardrawlings 18 May 2016

NB - even if we doubled our commission levels in the UK, we'd still be by far the cheapest agents in the entire world.

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Agent_PeeBee
Agent_PeeBee 18 May 2016

Clueless. Someone needs to take these people's computers away from them so they can do no more harm than they already have.

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richardrawlings
richardrawlings 18 May 2016

Nonsense! The cost of selling a house nowadays has little bearing on the fees charged. Don't believe your own spin on this. Fees have spiralled down to pathetic levels in areas where weak agents have allowed...

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Simon Oliver
Simon Oliver 16 May 2016

The best solution is to buy a property that has built-in income generating potential: a nice house with a couple of gites in the grounds is a good start. In France, the rune of thumb is that one 2-bedroomed...

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I suggest the answer is to have the notary system being one legal person who represents both parties. Having experienced it a couple of times in France it was a dream compared to our dysfunctional system....

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warren
warren 03 May 2016

It's enough to make me weep into my Pimm's :(

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james anderson 03 May 2016

The sad demise of the croquet lawn...

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