Early Christmas Present for Tenants - Latest Rental Summary
Some of the report headlines in 2013 have been pretty scary when it comes to rents. We’ve been told they have been at ‘record levels’ and grown ‘twice as fast as wages’ Rental reports have also been quite contradictory with some saying “Late rent lowest since 2008” and other saying “rent arrears double in six years”.
But the reality is 12 months on, rental income according to most of the reports has hardly changed since September 2012:-
January 2013 September 2012
Homelet figures: £806 £808 +0.24%
Belvoir Lettings: £685 £680 +0.73%
LSL: £753 £741 +1.61%
With inflation running at around 2 to 3% this year, it’s clear rents aren’t actually keeping up. This means unless the landlord is benefiting from property price rises (and few are) then their real returns year on year are down. And the main cause? Wages. A lack of wage growth – especially disposable – means rents can’t rise as the two are intrinsically linked.
Here are the main report headlines:-
“Rents in Wales and the North East outperform rest of country. (Nov 13 - England, Wales & Scotland)”
“Average rents for all offices trading over the last five years in November 2013 were £685, which is just a £1 less than October 2013. (Nov 13 – England, Wales & Scotland)”
“Rents rise twice as fast as wages over past year. (Nov 13 – England & Wales)”
Homelet
“Rents stabilise across the UK. (Nov 13 – England, Wales & Scotland)”
SpareRoom
“Average room rents have increased by 4% since 2012, with the average double room now costing £116 a week including bills. (Nov 13 – England, Wales, Scotland & NI)”
And from ONS’s perspective, wages are growing at less than 1%, so no wonder even tiny amounts of rent growth is exceeding wage growth.
What does this mean for Landlords in 2014?
What does this mean for Tenants in 2014?
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