New analysis from Countrywide plc has shown an increase in the average UK rent for newly let properties.
In January, average rent for newly let properties in the UK was £883pcm, an increase of 2.8% year-on-year. One and two-bedroom properties see the greatest increase in rent up 8.5% and 3.6% to £751pcm and £810pcm respectively. Three-bedroom properties see a 1.6% increase to £930pcm, whilst four-bedroom plus properties see a 3% decrease to £1,345pcm.
In the regions, Greater London sees the largest increase in rent year-on-year, up 10.6% to £1,265pcm, followed by Wales up 6.1% to £666pcm and the South West up 4.1% to £765pcm. The only region to see a decrease in rent year-on-year is the South East, down 4.1% to £1,035pcm. This is due to a fall in demand for rental accommodation in the South East, as more tenants move out of the private rented sector and into the owner occupier sector.
The average UK rent for renewed tenancies is now £835pcm. One-bedroom properties see the greatest increase in rent year-on-year, up 3.3% to £681pcm, followed by two-bedroom properties up 1.9% to £763pcm and three-bedroom properties up 1.7% to £875pcm. Four bedroom plus homes see rents stay broadly the same with just a 0.2% decrease in average monthly rent to £1,350pcm.
The majority of UK regions see an increase in rent for renewed tenancies in January 2015. Scotland sees the greatest increase up 5% year-on-year to £634pcm. Greater London follows with a 4.7% increase to £1,110pcm and the Midlands with a 3% increase to £622pcm. Some regions see a decrease in rent year-on-year with the North of England down 1.2% to £599pcm, followed by Wales down 0.7% to £592pcm and the South East down 0.5% to £1,010pcm.
All occupied rental properties: the average UK rent for all occupied rental properties is £836pcm. Year-on-year average rents have increased for all property sizes with the smaller properties leading the way. One-bedroom properties see the greatest increase in rent year-on-year up 2.7% to £688pcm, followed by three-bedroom properties up 2.2% to £875pcm, two-bedroom properties up 1.9% to £768pcm and four-bedroom plus properties up 1.3% to £1,328pcm.
All regions see an increase in average rent year-on-year with Greater London seeing the largest increase, up 4.4% year-on-year to £1,137pcm, followed by Central London up 3.8% to £2,448pcm, Wales up 2.4% to £641pcm and the South East up 2.1% to £984pcm.
Arrears have decreased year-on-year in all regions apart from the North of England where they have stayed the same, and Central London where there has been a marginal increase of 0.6%.
Nick Dunning, Group Commercial Director at Countrywide plc, said: “Renting is a flexible and relatively hassle-free way of living which suits many people's lifestyles. It allows them to settle in a location where perhaps they couldn’t afford to buy but they enjoy living in. With a growing population of lifetime renters, increasing the amount of good quality, affordable rental accommodation is needed to meet this demand.
With banks making it easier for landlords to offer longer tenancies and with more competitive buy-to-let mortgage products available, now is an ideal time for landlords to expand their portfolios and provide a more diverse range of affordable rental properties throughout the UK, not just in London and the South East as many would expect.”