According to the report, rents for two and three-bed properties also grew in September, but at slower rates, 0.09% (from 0.12%), and 0.11% (from 0.18%).
Overall rental growth has showed signs of easing in the wake of July’s Brexit vote, from 0.12% in August to 0.09% last month. The fact that one-bed properties are bucking this trend suggests demand for smaller rental properties remains buoyant. Around the UK, Scotland saw the greatest rental growth for one-beds, rising 0.36% in September, closely followed by East England at 0.35% and the East Midlands at 0.29%. London was at the other end of the scale; one-bed rents were flat in September, while all-bed rents fell by -0.04%.
The figures follow a call from Housing Minister Gavin Barwell, at the Conservative Party Conference1, for lower minimum space requirements for new build properties, to improve affordability for first time buyers. However, with rent payments remaining the main financial pressure for aspiring homeowners, and 1.8 million new households expected to rent rather than buy by 20252, the continued growth in one-bed rents demonstrates how important it is that the buy to let sector is not overlooked in the provision of new affordable housing.
John Goodall, CEO and co-founder of Landbay said: “Housing has been high on the political agenda this week, and it seems that policy makers are resolute in their ambitions to make home-ownership more affordable for people across the UK. There’s no denying most people aspire to own their own home, but it’s critical that efforts to bolster the countries housing stock don’t overlook the importance of the buy to let market for a supportive and sustainable housing market.
RICS’ forecast that 1.8 million more households will be looking to rent by 2025 is a stark reminder of the scale of future demand for the rental market. The fact remains that those building up toward a house purchase rely on a well served buy to let market to ensure that excessive rental growth doesn’t dampen their purchasing power.
The challenge is exacerbated by record low interest rates, which may make mortgage borrowing cheaper for those able to buy a home, but also mean that house prices, and indeed rents, are growing more quickly than the money they have saved in bank and building society accounts. The overall picture is one of moderating rents, which is good news for those in shared accommodation, but an under supply of one-bed properties will continue to restrict the ability for aspiring homeowners to save up for a house of their own.”
Overall, rents across the UK grew by a modest 0.09% in August, taking annual growth to 1.65% (down from 1.83% in August). Rents grew across all regions bar London, where they fell by -0.04%, and the North East, dipping by -0.03%. The average UK rent regardless of property size is now £1,187, with London’s average being £1,891, and the rest of the UK being £747 per month.
