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.”

Join our mailing list:


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

    Reply to this comment

Leave a comment



Latest Comments

Spencer Fortag
Spencer Fortag 30 Nov 2016

I am glad that someone listened to me!

view article
Tony Gimple
Tony Gimple 27 Nov 2016

It's not just the lack of estate agency advice that's costing landlords money; most are getting seriously bad advice from their accountants resulting in tax bills far higher than they need to be. Likewise,...

view article
Sally Walmsley
Sally Walmsley 18 Nov 2016

The RLA stands by its sell-off statistics. While we welcome the feedback from Mr Jagota and are delighted to hear how well things are going for landlords in the north east, we would like to make it clear...

view article
Sheryl87
Sheryl87 18 Nov 2016

The high employment levels and the vibrant economy has led to ever-increasing demand for rental properties, especially from professionals relocations from other cities. This has led to more experts teaming...

view article
Sheryl87
Sheryl87 18 Nov 2016

Renting out your house can be risky business. It's good to think about residential landlords insurance. Standard cover includes buildings cover and cover for loss of rent following damage to a property...

view article
AmberMorris
AmberMorris 09 Nov 2016

Fear of ghosts, really?? Ok, I get the fear of bats in the attic and mice and rats running under your nose - those are easy to deal with pest issues which are really unpleasant and can turn you off. But...

view article
AmberMorris
AmberMorris 08 Nov 2016

In my experience, It has always been a matter of discussion between the landlord and the tenant. There are cases when it's clear who's responsible for the pest control costs. I see a lot of people in forums...

view article
warren
warren 08 Nov 2016

There you go buddy :)

view article
Agent_PeeBee
Agent_PeeBee 07 Nov 2016

Any reason why my comment to this 'article' has not been published?

view article
Sean Lees
Sean Lees 04 Nov 2016

I don't think anyone can say dogs or cats are better or worse; depends on the animal, its age, how long it's left inside, etc. How bad the mess is depends somewhat on whether you are renting furniture...

view article
daniel black
daniel black 25 Oct 2016

I've been keeping a close eye on what the effect of Brexit has been on the rental market and it's a very mixed bag. Whilst the majority of the news focuses on London's market. I think this time next year...

view article
Northerner
Northerner 20 Oct 2016

Any views from outside the M25? No wonder politicians can't get the housing big picture when everyone seems to think that London is the yard stick, when it absolutely is not.

view article

Related stories

More articles from Landlords

Specialist Lending Roadshow 2017

24th-27th November

4 days
7 specialists
4 locations
Free to attend

Click here to register now