Rent levels – London drops but most regions still rising
The latest monthly rental index produced by insurance provider HomeLet shows a four per cent surge in the all-UK average rent over just three months, but big differences across different regions.
The average rent in the UK is now £987, up just 0.2 per cent on last month but four per cent higher than June’s figure of £951. When London is excluded, the average rent in the UK is now £828, up by 3.9 per cent annually.
Seven of the 12 regions monitored showed an increase in rental values between August and September this year, with the North East seeing the biggest increase of 2.2 per cent.
In September – last month – the average rental value in London (£1,646) was no less than 99 per cent higher than the rest of the UK, excluding London.
Looked at on an annual basis, 10 of the 12 regions showed an increase in rental values between September 2019 and September 2020, with the South West the winner – it has witnessed a 6.6 per cent rise.
But there’s more bad news for London; year-on-year rents are down 2.4 per cent; Northern Ireland also shows a yearly decrease, also with a 2.4 per cent fall between September 2019 and September 2020.
“Whilst it’s undoubtedly the case many landlords are being supportive of their tenants and agreeing temporary reductions or deferrals, it will be encouraging for them to see rents agreed on new tenancies, in almost all parts of the country, are continuing to hold up and generally edge forward” says Martin Totty, chief executive at HomeLet.
“This is likely because tenant demand remains strong whilst supply may be a little more constrained if some landlords are selling into a stronger sales market, even if that could be a short term phenomenon. It also doesn`t help tenants much if, for them, the prospect of securing first time mortgage finance remains as elusive as ever” Totty continues.
“So, those landlords committed to the sector for the long term and having shown their willingness to confront the multiple headwinds of: taxation change; new regulatory requirements; and, in certain circumstances, longer notice periods to gain possession of their properties, may still be rewarded for their flexibility and their perseverance with reasonable returns on their investment risk.”