The HomeLet Rental Index – the UK’s most comprehensive and up-to-date data on rental values in the UK – shows a steady rate of inflation in rental prices. In a market which is sensitive to the balance between supply and demand, this steady growth suits both tenants and landlords.
However, the initial findings from the company’s survey of over 2,900 landlords have shown that more than a third have concerns over Brexit’s impact on the market.
The headlines from this month’s HomeLet Rental Index are:
- The average rent in the West Midlands is now £701, up by 1.3% on the same time last year
- The average rent in the UK is now £943, up 1.7% on the same time last year
- When London is excluded, the average rent in the UK is now £780, up 1.8% on last year
- Average rents in London are now £1,632, up by 3% on last year
- The region with the largest month-on-month decrease was the East Midlands, showing a 1.6% decrease between August and September 2018
- The region with the largest year on year increase is Scotland, showing a 5.6% increase since September 2017
- This month has seen rental prices rise in 11 of the 12 regions monitored by HomeLet, with only the North East seeing a decrease
Commenting on this data, Martin Totty, chief executive at HomeLet, said:
“The data for September shows that rents UK wide are on average 1.7% higher than the same time last year, which continues the trend we have been seeing throughout most of 2018.
“Historically, we have seen a higher rate of rental price growth in London and the South East. However, over the last six months the rate of growth in these areas has slowed to reflect a similar rate to the rest of the country. Throughout the UK, the longer-term trend is one of fairly narrow, shallow growth over a longer period of time. Over the last year, the growth rate has remained below the average rate of inflation in the wider economy, and the growth in the housing market.
“The rental sector can be seen to be performing at a much steadier rate, with a lower level of volatility when compared with house prices.”
The initial results of HomeLet’s annual Landlord Survey corroborate this largely positive picture, with nine out of ten landlords intending to either keep or expand their property portfolio in the next year.
However, the potential impacts of Brexit rate highly among their main concerns, along with the possibility of increased regulation through legislation and changes to house prices.
“While more than 90% of landlords intend to either keep or expand their property portfolio in the next 12 months, they are not without their concerns. Our initial results show that the three main concerns that landlords have are the macro-economic impacts they face on their finances - further changes to legislation, the potential implications of Brexit and house price values.
“The results suggest that while landlords are not planning to leave the market at this stage, uncertainty over the wider economic picture - especially when Brexit is added into the mix - could easily change this.
“The current, steady growth within the private rental sector suits the needs of both tenants and landlords. However, should landlords change their stance and begin to exit the market, therefore reducing the supply of rental properties, there is a possibility that rental prices could rise, as at this stage there is no indication that the demand for rental properties is going down.”
As the UK’s largest tenant referencing firm, HomeLet reference 500,000 tenants every year. The HomeLet Rental Index provides the most comprehensive and up-to-date data on rental values in the UK.
The trends reported within the HomeLet Rental Index are brand new tenancies, which were arranged in the most recent period, providing an in-depth insight into the lettings market.
For more information, or if you would like to receive the results of the survey, please register here