Good news for landlords as UK average rent rises 10% in a year

Landlord Expert
By Landlord Expert April 22, 2015 13:12
  • Rents have risen in 11 out of 12 regions across the UK comparing Q1 2015 to Q1 2014
  • The average rent in the UK is now £902 (£720 excluding Greater London)
  • The average rent in Greater London is now £1,427
  • Rental growth highest in the South West of England with prices 13.7% higher than a year ago 

New findings from the HomeLet Rental Index show that rents across the UK are 10.2 per cent higher than a year ago. The average rent on a tenancy signed in the UK during the first quarter of 2015 was £902, compared to £819 for tenancies signed during the first quarter of 2014. Rents are higher in every region of the UK except Wales compared to a year ago.

Excluding Greater London from the findings, average rents across the rest of the UK are 6.7% higher than a year ago, which is the highest rate of annual growth recorded by the HomeLet Rental Index since its inception in 2008.

The index shows the strongest growth took place in the South West of England, with rents 13.7 per cent higher in Q1 2015 compared to Q1 2014. Outside of Greater London and the South East, the South West of England has the highest rents in the UK, with the average rent now standing at £851 per month.

The HomeLet Rental Index figures for the first three months of 2015 have seen steady growth in rent prices with 10 out of 12 UK regions showing price rises compared to the previous month. Figures for the three months to March 2015 show an average UK rent growth of 1.5 per cent when compared to the three months to February 2015.

Regional rental figures from the March 2015 HomeLet Rental Index

Region

Average rent 3 months to March 2015

Average rent 3 months to Feb 2015

Monthly Variation

Average rent 3 months to March 2014

Annual Variation

South West

£851

£832

2.3%

£748

13.7%

North West

£671

£657

2.2%

£635

5.6%

N. Ireland

£583

£571

2.1%

£562

3.7%

South East

£893

£881

1.4%

£847

5.5%

East Anglia

£769

£760

1.2%

£726

6.0%

East Midlands

£605

£598

1.2%

£571

5.9%

Greater London

£1,427

£1,413

1.0%

£1,310

8.9%

Scotland

£631

£625

1.0%

£587

7.5%

Wales

£577

£576

0.2%

£582

-0.9%

West Midlands

£643

£642

0.1%

£600

7.1%

Yorks & Humber

£611

£613

-0.3%

£571

7.0%

North East

£520

£533

-2.4%

£501

3.8%

 

 

 

 

 

 

Overall

UK average

 

£902

 

£889

 

1.5%

 

£819

 

10.2%

 

UK ex Greater London

 

£720

£710

1.4%

 

£675

6.7%

Notes:

source HomeLet

Based on new tenancies in Jan, Feb and March 2015

Based on new tenancies in Dec 2014 and Jan & Feb 2015

Comparison of average rent in 3 months to end March 2015 and 3 months to end Feb 2015

Based on new tenancies in Jan, Feb and March 2014

Comparison of average rent in 3 months to end March 2015 & 3 months to end March 2014

The HomeLet Rental Index figures also show that the annual growth of rent prices in the Greater London rental market and the rest of the UK are continuing to converge. While rents on new tenancies spiked up sharply during 2014, the pace of growth has been more modest during the first three months of the year. By contrast, rents beyond the capital have been rising more quickly.

Annual variance comparison figures: Greater London vs rest of the UK

 image003

Commenting on the report, Martin Totty, Chief Executive Officer, Barbon Insurance Group, parent company of HomeLet, said: “With average rents for new tenancies across the UK now more than 10 per cent higher than a year ago, what we are seeing is a market that is experiencing sustained demand from increasing numbers of people requiring privately rented property.

 “However, rent price growth in London is no longer outpacing that of the rest of the UK. The HomeLet Rental Index shows that during the first three months of 2015, rents on new tenancies in six regions of the UK rose more quickly than Greater London. Demand for rental property in London remains high, but rent price growth in many regions outside of the capital has matched or exceeded London over the past three months.”

HomeLet Rental Index Regional Variance Figures for the three months to end–March 2015

image004

HomeLet Rental Index Figures for new tenancies agreed in March 2015 only

image005

Landlord Expert
By Landlord Expert April 22, 2015 13:12

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