Newly let home rents up 3.1%

Newly let home rents up 3.1%

According to the latest analysis from Countrywide plc, rents for newly let homes continued to grow in 2015 albeit at a slower pace than in 2014. Average rents grew by 3.1% over the year, taking the average monthly rent to £919pcm.

Rents rose in all regions of the country with the East of England seeing the highest growth, up 6.5%, and the Central London market seeing the lowest with a 0.5% growth.

34% of tenants who renewed their tenancy faced higher rents, an increase of 7% from last year. However, the average rent for renewing tenancies only grew by 1.3%, less than for those moving into a new home.

Rental growth over 2015 was supported by increasing demand for rental homes and low stock of homes available to rent. This imbalance between supply and demand has intensified competition for homes in the market. The average property is now let within 20 days of being instructed; two days quicker than it was in 2014. The time to let has fallen across the country, but homes in the North of England and the Midlands are now let almost three days quicker.

Greater London as a whole saw a slowdown in rental growth in 2015 compared with 2014, but rents still rose by 4.7%. As rents have risen in recent years, tenants have increasingly looked to cheaper areas in Outer London.  As a result the proportion of under 25s living in the rental sector in London fell by 4% in 2015, the continuation of a longer term trend. As rents continue to increase and outpace earnings in the capital, younger people and those in lower income brackets, have found it harder to remain in the capital, particularly in central areas. Surrounding regions in the South of England have seen small growth in the proportion of under 25s in their market, as Londoners look further afield for more affordable markets.

Table A: Average rent for newly let units

Region

Average rent in Q4 2015

Average rent in Q4 2014

Year-on-year increase in rent

Greater London

£1,292

£1,234

4.7%

Central London

£2,497

£2,485

0.5%

East of England

£945

£887

6.5%

South East

£1,139

£1,118

1.9%

South West

£816

£784

4.1%

Midlands

£663

£651

1.8%

North

£636

£627

1.4%

Scotland

£662

£637

3.9%

Wales

£666

£648

2.8%

Total

£919

£891

3.1%


Johnny Morris, Research Director at Countrywide, said: “A mix of steadily increasing demand and a lack of homes to rent supported rental growth in 2015, even though wage growth remained subdued.  In the capital rising costs meant renters were more likely to move to Outer London or the commuter belt in search of more affordable places to live.
 
2016 looks to be a complicated year for landlords as the government focuses its efforts on boosting homeownership. The additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behaviour.

With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents, although any rises will be tempered by affordability pressures.”

Average rent for occupied units

Region

Average rent December 2015

Average rent November 2014

Average rent December 2014

Year-on-Year Increase in rent

Month-on-Month Increase in rent

Greater London

£1,196

£1,192

£1,132

5.7%

0.3%

Central London

£2,449

£2,445

£2,435

0.6%

0.2%

East of England

£862

£859

£829

4.0%

0.3%

South East

£997

£995

£981

1.6%

0.2%

South West

£737

£736

£724

1.8%

0.1%

Midlands

£629

£629

£620

1.5%

0.0%

North

£624

£623

£612

2.0%

0.2%

Scotland

£641

£639

£624

2.7%

0.3%

Wales

£650

£649

£636

2.2%

0.2%

Total

£857

£856

£834

2.8%

0.1%

Join our mailing list:

Leave a comment



Latest Comments

brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

view article
IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

view article
IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

view article
cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

view article
Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

view article
NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

view article
Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

view article
Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

view article
jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

view article
SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

view article
Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

view article
AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

view article

Related stories

More articles from Landlords