publication date: Feb 3, 2014
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author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
What’s Happening to National Rental Trends
Over the last few months, the headlines would suggest what is happening to national rents varies dramatically at a national level.
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We’ve seen headlines such as “UK rents rise by 8%” (Sequence) through to “Rent rises slow by half over the course of 2013” (LSL). Then some reports talk about “Tenant rent arrears rising” (Money Advice Trust) while on the other hand, the Telegraph recently reported “Landlords profit as tenant arrears fall”.Despite these apparently conflicting headlines, the rental reports are, at the moment, actually showing very similar trends both nationally and even at a regional level, as the chart shows (download the full version for the chart).
The main indices we track monthly are Homelet, LSL and Belvoir. Belvoir and Homelet are national (ie include Northern Ireland, Wales and Scotland), while LSL’s Buy to Let index covers England and Wales. So although they aren’t perfect comparisons, over time, all three are showing that on average, rents haven’t changed that much from December 2012 to 2013.Even the highest ‘leap’ shown by Homelet equates to a 3% increase – in other words rents have either stayed the same or risen in line with inflation which, on average since 2000, has run at just over 3% per year.What we do know from working with rental trends is rents rise towards the spring time, then typically drop back towards the last month or two at the end of the year. And this year isn’t much different, with both Homelet and LSL showing falls back towards January 2013 levels. Since 2010, LSL's index suggests prices have increased by around 8%, so on average, they suggest rents are growing around 2.8% per year, just behind inflation.Belvoir tends to show a very consistent picture throughout the year and this may be as this data is taken from established offices which have been trading consistently since 2008, and represents areas such as Scotland where rents have been stable, if not showing some slight falls.The Belvoir data over time shows, on average, rents in the UK have been pretty similar not just over the last 12 months, but since 2009. Average rents for the UK have fluctuated from £674 per month to 2013’s average of £687 per month – just a £13 difference over a four year period. The government’s data tends to confirm this low growth trend is accurate. The Office of National Statistics shows on average rents have increased in England by 1% every year for the last 10 years.(Download the full version for the chart) So, not the most exciting update – but good news for tenants, rents are pretty stable and most of the experts say so!
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