publication date: Jul 21, 2014
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author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
What happened to the rental market in June 2014?
Every month Kate Faulkner analyses and comments on the various rental indices to get behnd the headlines of what’s really happening to rents both nationally and regionally.
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Rental Indices Headlines
Despite this month's headlines suggesting rents are increasing, on the whole rents are actually static apart from London - but even there we haven't seen much of a rise.
- Move with Us "Average advertised rent for the country exceeds £1,000 for first time. (May 14 – England, Wales & Scotland)”
- Belvoir Lettings “In Q2 2014, the average rent for offices across England which have traded consistently over the last five years is £687 per month - a very slight year on year increase. (Q2 14 – England, Wales & Scotland)”
- Acadata/LSL “Rent rises accelerate in May. (May 14 – England & Wales)"
- Homelet “Latest figures from Homelet Rental Index show rents now rising four times faster than incomes. (May 14 – England, Wales & Scotland)"
- SpareRoom “Rents across the UK are 7% higher than this time last year. (May 14)”
What’s happening to average Rents Nationally?
we track rents over the last year from three main indices. Homelet includes quite a bit of
rental data from London, so it’s typically higher than LSL and Belvoir. Homelet and Belvoir both cover all of Great Britain - whereas LSL data doesn't include Scotland.
Kate Faulkner’s comments on latest rental indices trends
“In the main, this year rents are pretty static according to the leading indices from Your Move, Reeds Rains and Belvoir. Exceptions to this seem to be room rents which appear to be rising. This could be due to the increase in quality rooms available to rent. Homelet appears to be suggesting much higher increases than all other indices, but this is understood to be because more people are renting higher priced properties rather than existing properties for rent being increased.”
What’s happening at a regional level?
Rents still vary from one region to another and so do the trends. Here’s a summary of what’s happening in each region, according to the main indices:-
Move with Us “Rents in the capital have reached £2,300, the highest average outside of the ‘Olympic bubble’ of the summer of 2012. Having already increased £103 in the last 12 months, the London market may again reach peak levels within a year. Outside of the southern boom,Scotland is experiencing its own resurgence, having continually improved since November lastyear to a record average rent of £726. The market has grown by over £50 since the sameperiod of 2013 and the upward trend looks set to continue, having been one of the moststable regions of the last two years.
“There has been less positive news in the northern markets as the average asking rent in the
North West, Yorkshire & Humber and the North East fell slightly in May. The North East has
now hit a two year low of £639 but is generally regarded as a difficult market to predict
having experienced peaks and troughs since 2012. (May 14)”
Belvoir Lettings “
Rental levels in the North East, East Midlands, East Anglia and North West are yet to recover
to the height of 2008. The area that has just recovered to the 2008 heights is Yorkshire. Rents
exceed the 2008 height in the South East, South West, West Midlands and London. (May 14)”
Acadata/LSL “
Rents in seven out of ten regions are higher than a year ago. The fastest annual increase is
in the South West, where the average monthly rent is now 3.9% higher than in May 2013.
This is followed by a 3.8% annual increase in the East Midlands and annual rent rises of 2.3%
in the North West. In the South East annual rent rises now stand at just 1.2%, while rents in
the capital are now only 1.0% higher than in May 2013. In three regions rents have dropped
over the last twelve months. This was led by the North East with a 3.6% fall, followed by an
annual fall of 2.3% for rents in the East of England, while rents are now 0.4% lower than a
year ago in the West Midlands. (May 14)”
Homelet “Average rents dropped marginally in Northern Ireland, Yorkshire & Humber and Scotlandwhen compared to last year. Average rental values in the Capital remained unchanged monthon month at £1,348pcm. Rents in London were 9.4% higher in May 2014 when compared tolast year, when average rents were £1,232pcm. (May 14)”
Room Rents
SpareRoom “This month’s figures show an increase in rents in Scotland with an annual rise of 9% bringing the average rent to £99 per week. Both the East and West Midlands saw a 3% rise year on year, bringing rents up to £88 per week. London’s rents remain high but there’s significant
variation between areas; the highest rents are found in South Kensington at a whopping £236
per week and the lowest rents are in Abbey Wood at £100 per week. (May 14)”
Kate Faulkner comments on Regional Rent Variations:
“Rental performances reported at a regional level differ quite a bit between the different indices. MoveWithUs seem to show a much bigger average for London than the rest of the indices, which are around the £1,200-£1,400 per month mark. Rental averages for the North East are typically not worth tracking as they vary so much in the region –hence large rises one month and falls the next. It’s clear Scotland, in the main, appears to be showing rent rises which are being blamed on the loss of tenant fees, but time is required for this conclusion to be proven. Overall, rents are static to showing small rises, but most increases are below inflation – good news for tenants, not so good news for landlords who have to cover rising costs. Room rents continue to outperform the rest of the rental market.”
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