"Modern properties provide all of the same benefits to renters that they do to homebuyers. Because of this, prices tend to be higher than your average rented property"
- Bekki Leaves - FCC Paragon
Renters seeking the benefits of modern homes are paying a rental premium of up to 18%, according to new analysis by FCC Paragon.
Modern properties typically offer improved energy efficiency, reduced maintenance issues, and updated fixtures and fittings. However, these features come at a price.
“Modern properties provide all of the same benefits to renters that they do to homebuyers,” said Bekki Leaves, managing director of FCC Paragon. “Because of this, prices tend to be higher than your average rented property. But we can also point towards the prime locations of many modern developments, from marinas and riverfronts through to the beating heart of city centres, to explain why renters are willing to pay more.”
The company’s data shows that modern homes now represent over 40% of rental listings in England. Of the 109,727 rental properties currently available, 45,563 are categorised as modern, 41.5% of the total.
London has the largest share, with 47.1% of rentals considered modern. This is followed by Yorkshire & Humber at 40.3%, the West Midlands at 40.2%, and the North West at 39.6%. The South West has the lowest share, with just 32.1% of rentals classed as modern.
However, tenants looking to secure one of these newer homes are likely to face a higher monthly cost.
FCC Paragon reports that the average rent in England is £1,419 per month, while modern homes command £1,578, an 11.2% premium, or £159 more each month.
The East of England shows the largest gap, where modern homes cost an average of £1,469 per month, 17.7% more than the regional average. Other regions with significant premiums include the North West (17.2%), North East (15.7%), London (14.8%), and South East (11.9%).
“Given the amount of new developments popping up across the country, new-build rental homes, from flats to detached houses, are going to account for an increasingly large proportion of the market,” Leaves explained. “Which means their price premium will inevitably start to level off, giving renters access to all the associated mod-cons without having to pay through the roof.”
