Rents have seen a good performance year on year, in line with wage growth increasing above inflation almost for the first time since the start of the credit crunch. The LSL and Belvoir index show the highest increases as they cover advertised ie latest rental trends, while the Countrywide index shows that for existing tenants, they are seeing some increase in rents, but at a much lower rate than those tenants who are new to the market.
This shows that statements claiming rents are 'extortionate' or landlords are 'exploiting' tenants with large increases, is not an accurate reflection of what is actually happening in the self-regulated rental market, and a misrepresentation of overall rental movements to both tenants and landlords.
At a regional level, property prices range, according to the ONS, from London's £531,000 average versus the North East lowest average house price of £158,000,a difference of 3.36 times. According to the indices, the highest average rent is £1,442 per month in London from Belvoir and the lowest they record is £609 per month in the East Midlands, ie just over double. This shows that rents don't vary at the same rate as prices and although there are some large increases, year on year, of 8-10%, these are mostly for newly advertised properties shown in the Belvoir and LSL indices. The Countrywide index shows that existing tenants (the majority) are benefiting from private landlords hardly increasing rents at all.
It is also important to put these rental rises into context. Since the credit crunch, PRS rents fell by between 5% (London) and 20% (Nottingham) in 2008/9 due to a glut of properties which couldn't be sold. Since that time, many rent rises have been reported as 'increases' when in fact they were, in reality, just 'recovering'. Areas such as the East Midlands, although seeing a year on year rise of 6-8% for new tenants (or nothing for existing tenants), today's rents are actually only just recovering to previous heights seen in 2008, seven years ago.
Bearing in mind rents should, ideally, rise in line with inflation, this very much means over the years, landlords, especially to existing tenants are giving themselves a 'pay cut'.
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