The HomeLet Rental Index has shown that while the average rental prices across the UK have risen during the second quarter of 2018, the demand for rental properties remains high; and experts predict this trend to continue as more people, dubbed ‘Generation Rent’, are choosing to rent for life due to rising house prices and instead spend deposits and savings on experiences and travel.
Commenting on the data, Martin Totty, chief executive of HomeLet, said: “The data used in the Rental Index gives us a forward-looking view of the rental market. Over the next quarter I think there are a lot of factors at play in the Private Rented Sector (PRS) both demand for and supply of properties impacting average rents.
“We don’t yet know if the government’s squeeze on private landlords via taxation changes and more regulation will discourage their continued participation in this important sector and begin to reduce supply. Any constriction of the number of properties available for rent can’t be good news for tenants if all it achieves is to increase rents.
“However, the demand for rental properties remains strong and will continue in the near term, which has to be positive for property owners. If some landlords do choose to sell up there are many who will see that as an opportunity to improve their yields as demand still exceeds supply, a point many commentators have made via the many consultations government have invited on their proposals for the PRS.”
As the UK’s largest tenant referencing firm, 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 represent new tenancies which were arranged in the most recent period, providing a forward-looking insight into the lettings market.
Martin Totty continues; “The data for this month is very interesting when we examine the regional variations. Tenants in London are paying more than they were this time last year. However, the average London rent is still below where it was two years ago, following a dip in the summer of 2017.
“We are seeing some interesting data in other regions, including a contrasting picture in Northern Ireland. This region shows average rental prices growing faster than anywhere else in the UK, but as a tenant you will still be paying a lower proportion of your monthly income on rent when compared to the rest of the UK.”
Overall in the UK, rents have risen by 1.8% in the last year, equating to a £16 average monthly increase per property.
Rents increased in 10 of the 12 areas of the country monitored by the HomeLet Rental Index between May and June 2018, with only Wales and the North East seeing a monthly decrease. As well as this, Wales has seen the average rental price fall by 0.8% over the last year, the only region to see a decrease in prices in the last 12 months.