Despite much hype, rental levels in many regions are still not back up to those of 2008.
The claim has come from Belvoir managing director Dorian Gonsalves, whose firm has been measuring rents for four years.
Gonsalves said: “The Belvoir Lettings Index has been running since March 2008 and during this time we have seen the rise, fall and recovery of the rental market.
“Belvoir has over 140 offices nationwide and is expanding rapidly, but at present we not have a strong London bias. We have learnt about variations in rental data and how to analyse the information to make sure we can track trends accurately and report on a regional and even office-by-office basis.
“In 2012, with over four years of analysis, we can now confidently comment about national rental trends, regional differences and local changes at office level.
“During 2011 there were frequent reports in the national press about the stratospheric rise of UK rents. However, although the Belvoir Index reveals rental increases in 2011 versus 2010, many regions have still not recovered to the rents achieved in 2008.
“Just five areas across the UK have overtaken the rental heights of 2008. These regions are London (+5%), North-East (+6%), Yorkshire (+2%), South-West and West Midlands (+1%).
“Other regions such as the North-West were up in 2011 compared to 2010, but were still down compared to 2008 heights (-3%), with the East Midlands (-6%) and East Anglia (-5%) the furthest away from 2008 heights.
“We are predicting that this regional rental fluctuation is likely to continue throughout the year, although some areas such as the South-East are likely to see a higher increase as rental prices force people out of London into the Home Counties.
“With regard to other areas, I think rents will be relatively stable and any increases are likely to be very modest.”
He added: “The UK rental market is strong, but landlords should be realistic about the rents that can achieved in their area.”
According to the Belvoir index, in January 2011 the national three-month rental average started at £685, peaked at £688 in February and hit a low of £678 in May and June. By the end of 2011, the average rental income in December was £679.
During September 2008 rents reached a height of £709, slipping to a low of £674 in July 2009 (-5%), rising to £697 in 2010 and settling in 2011 at around £680 – still 4% below the record heights of 2008.
Comments
The cost of living is oustripping wages rises, and will do so for the forseeable future with ultra low interest rates and also further quantitative easing announced today.
Rents simply cannot rise in an environment where potential tenants are becoming relatively poorer by the day.