New figures on levels of rent show a stable market holding up well in the face of ongoing uncertainties.
Homelet’s latest Rental Index shows the average rent for the UK is now £932, a rise of 2.5% for the year to January. And the figures hold up, even when taking the higher cost of renting in London into account. When excluding the capital, the average rent in the UK was 2% up on a year ago at £775.
Looking at London, rents rose by 3.7% to £1,588, a rate fuelled by potential homeowners staying away from buying in a wait-and-see period before Brexit. Rents went up in all but one of the 12 regions outside of the UK’s capital, with the north-east recording a slight fall of 0.6%.
South-west England leads in regional rises
The best of the regional rises came in the south-west, where rents went up by 5.3% over the year to stand at £859. Strong buy-to-let markets in Manchester and Liverpool will have helped the north-west’s solid return of a 2.9% rise to £703, and it is a similar story in the West Midlands where an average of £698 per month is 2.8% higher than January 2018.
Homelet chief executive Martin Totty sees encouraging signs in the latest data, saying: “Positively for both tenants and landlords, this year we’ve seen stability in UK rental price growth, with increases remaining broadly in line with the rate of consumer inflation.
“For landlords there remains a sustained demand for property, with the private rental sector continuing to provide the market with both flexible and long-term housing options.”
“The slowdown in the rate of house price growth, as reported by the Nationwide House Price Index is being driven by the depressed London market, which saw house prices decline by 0.8% during the last four months of 2018. In contrast, we have seen average rental values in the capital rise by over 4% in the latter stages of the year. Ultimately, we would expect this theme to continue in London, if the demand for property outweighs supply.
“Private residential landlords will continue to play a key role in the wider UK housing market. Whilst the outlook for property investors remains positive, one of the key concerns for the market in 2019 would be a potential lack of supply in certain regions.”
