Rents accelerate into 2016

Rents accelerate into 2016

Compared to the same point a year ago, rents in January 2016 have risen by 3.6%. This is up from 3.4% annual rent rises over the twelve months to December.

This puts average rents at £790 per month, as of January 2016.

An accelerating annual pace of rent rises comes despite recent seasonal month-on-month drops in the latest market rents, dipping by 0.4% between December and January.

While rents have fallen on a monthly basis over the winter period, this trend is beginning to reverse into January, with the 0.4% latest month-on-month drop comparing to a 0.6% fall in December, 0.9% in November and a 1.2% monthly drop into October 2015.

Adrian Gill, director of estate agents Reeds Rains and Your Move, comments: Right now, canny tenants are taking advantage of the slightly cooler winter rental market, and securing tenancies with rents a little lower than in the peak autumn market last year. There are good deals to be had. But underneath this seasonality, rents are beginning to accelerate once again on an annual basis.


There is a huge shortage of housing in the UK, particularly compared to an accelerating population and an economy that continues to outpace neighbouring countries. Meanwhile, real wages continue to rise meaning many tenants are able to pay a little more rent if necessary. In a competitive market that is a recipe for rent rises.”

Rent rises in East Midlands and East of England overtake London

On a regional basis annual rent rises are now led by the East Midlands and East of England, with rents up 5.9% and 5.8% respectively since January 2015. This pushes London to third place on this measure, with rents in the capital 5.7% higher on an annual basis, marginally slower than 6.3% in the capital in December.

At the other end of the spectrum rents are lower than a year ago in the South East and North East regions, both seeing a 1.0% annual fall. Meanwhile the slowest annual rent rises are in Wales, up just 0.6% since January 2015.

Six out of ten regions have witnessed monthly falls in rents, in line with the overall month-on-month trend across England & Wales. This is led by London, with rents in the capital 0.7% lower than in December.

Tenants mend household finances in the New Year

Tenants in the private rented sector have paid down outstanding rent in January. On average late rent now stands at 8.2% of all rent due, representing an improvement on December’s figure of 9.3%.

However, tenant finances remain slightly more difficult to manage than a year ago, with the latest arrears rate of 8.2% comparing with 6.8% in January 2015.

On a longer-term basis late rent remains reasonably steady compared to the all-time high of 14.6% of rent in arrears seen in February 2010.

Adrian Gill concludes: “Some tenants seem to be applying New Year’s resolutions to keep up with the bills. But the best news is that they are able to do so and the money is there.

December is the most difficult month for most tenants, a fact which always shows up in all our statistics on late rent. That was no different at the end of last year. But regardless, renters have proven resilient and it’s encouraging to start off 2016 with tenants’ finances going the right way.”

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Comments

  1. Neil ParmerNeil Parmer19 February 2016 12:03:01

    Rents have been growing steadily inline with incomes at 12% since 2007. In London, incomes have grown by 10% while rents have increased by 34% due to a lack of supply and high demand. Neil Parmer - Proverty Adviser at Assured Properties

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Latest Comments

AbbieP.
AbbieP. 22 Jul 2016

"While house prices in the most expensive eleven boroughs have declined values in the cheapest eleven boroughs continue to rise" - not a nice way to even out the price range. London is overrated as it

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AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

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CommercialTrust
CommercialTrust 19 Jul 2016

Retirement investment has always been one of the biggest draws of buy to let. And the buy-to-let demographic is, on balance, older. (Over a third of our applicants are over 50 at the time of application.) It...

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Forrest Wheatey
Forrest Wheatey 11 Jul 2016

I find the time perfect for ever home-owner wannabe. Prices should slowly, but steadily drop, at least for the inner buyer. Making it harder for outsiders to buy properties (the whole Brexit thing means...

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property guru
property guru 11 Jul 2016

Why should Ajay even have to be looking for it. It should be public knowledge. Why is not just publish each years and to were it is and be AUDITED. Accountability.

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property guru
property guru 11 Jul 2016

Surprise suprise

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CommercialTrust
CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee
Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara
DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara
DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara
DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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