Are rents starting to rise?
Here is our February 2014 summary of all the key rental indices. You can either link through and read them
individually, or if you prefer download Kate’s REPORT HERE.
Despite many a comment about ‘rents being at their highest’ or ‘crazy prices’ they aren’t. One thing we have learned from the credit crunch is even in areas where demand is higher than supply, unlike when buying, rents are still very much linked to wages. As wages have hardly moved since 2007, neither have rents.
So why are some rental indices recording increases? Basically, they don’t go back far enough. The Belvoir Index I run goes back to 2008 when rents were at their height. Other indices started in 2009 and 2010. The ‘rises’ they are
picking up, bar London, are, in the main, rents recovering to their 2008 heights.
So if you rented in 2008 and are now renting again, then you won’t see much difference. If though you rented at the
low in 2009, for you there will ‘appear’ to be quite a big hike. From a long term landlords perspective though, they
don’t see rent rises in line with inflation – which is a problem as it means landlord’s real incomes are falling annually.
Kate Faulkner comments on Rental Report Headlines:
“With latest figures showing inflation is running at around 2% but wage increases are still lower – at 1.4%, it’s still proving to be tough to increase rents. This is despite the recovery in the property sales market, which means many properties previously being rented are now being sold as we recover from the credit crunch. It doesn’t seem however much demand exceeds supply, private rents are restricted by wage growth.”
“Average advertised rents increased in nine out of 11 regions in Great Britain in February.” (Feb 14 – England, Wales & Scotland)”
“Average rents for all offices trading over the last five years in February 2014 were £686 - only a £1 increase on January 2014. (Feb 14 – England, Wales & Scotland)”
Acadata/LSL
“Rent rises accelerate in February. (Feb 14 – England & Wales)”
“Rising rents in Capital drive up national average. (Feb 14 – England, Wales & Scotland)”
Nationally, Homelet (insurance company) records rents in Feb 2014 at £818 per month, up from £777 in 2013, while both LSL and Belvoir (agents) record £743 versus £731 and £686 versus £686 respectively. So from an agent’s perspective, rents aren’t that much different year on year.
Download Kate’s RENTAL SUMMARY REPORT HERE
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