Rising rents and sticky tenants spell good news for landlords
The latest data from HomeLet and Countrywide show rents outside of London continuing to rise, and more tenancy renewals as renters choose to stay put.
HomeLet says the average rent in the UK is now £947, up 0.9 per cent on last year - or up 1.3 per cent if London is taken out of the equation.
It says average rents in London itself are now £1,632, up by 1.4 per cent on last year and up 1.1 per cent on July this year, when the average rental price topped £1,600 for the first time.
The region of the UK with the largest year-on-year increase is Scotland, showing a 5.6 per cent rise between August 2017 and August 2018; the region with the largest month-on-month increase is also Scotland, showing a 2.0 per cent increase between July and August 2018.
This month has seen rents rise in all 12 of the regions monitored by HomeLet but the North East, South West, Wales and the East of England have seen a decrease in the rental prices from the same time last year.
Martin Totty, chief executive at HomeLet, said: “In contrast to house prices, which show more noticeable cyclical variations over time especially in areas of the country where the imbalance between demand and supply is more pronounced, UK-wide rents in August increased around one per cent compared with both the prior month and the same month last year.
“Our data demonstrates that the rental sector is showing a return to the long-term trend of steady, often below-inflation price growth.”
Meanwhile Countrywide’s monthly rental index, now rebranded under the agency group’s Hamptons brand, says rents on newly let homes in London - that is, homes advertised on the open market to let - fell for the third consecutive month and are now down 0.8 per cent year-on-year, despite around a fifth fewer homes available to rent now than 12 months ago.
However, rents on newly let homes in Great Britain - excluding London - rose 2.0 per cent year-on-year. Aneisha Beveridge, analyst at Hamptons International, said: “Moving is costly for both tenant and landlord. In a period of uncertainty, where tenants’ incomes and landlords’ yields are squeezed, more tenancies are being renewed.
“With affordability stretched and less choice available on the open-market, more tenants are choosing to stay put.
“And with landlord yields under pressure from high property prices and tax changes, fewer landlords want to run the risk of looking for a new tenant and suffering void periods. But rents outside London continue to rise.
“Wales and the Midlands have driven rental growth outside the capital to increase 2.0 per cent year-on-year, the strongest growth in nine months.”
Richard Truman, Head of Operations at Simple Landlords Insurance, added: “It’s great to see data from two such strong sources pointing to buoyancy in the market and some stability for landlords. There’s a great deal going on for landlords right now, but there are clearly silver linings to be found, and opportunities to be grasped. Our own research shows it really is the landlords watching the market and rolling with the changes who are going to come out on top.”