Rents continue to rise across the UK with many regions now keeping pace with or exceeding the pace of price increases seen in London.
HomeLet says the average rent on new tenancies agreed in the three months to July across the UK was £977 a month – if you take London out of the equation it drops to a rest-of-the-UK average of £761 a month.
Including the capital, the average UK rent price is now 11.8 per cent higher than in the same period of 2014.
The HomeLet index, which claims to provide the most up-to-date figures on UK rent prices, shows that rent price growth in the private rental sector is now extremely broad-based.
Three regions of the UK have seen rent prices rise at a rate exceeding that of London in the three months to July 2015.
In the south west of England rent prices on new tenancy agreements signed in the three months to July were 11.4 per cent higher than in the same period of last year. At the other end of the UK the Scottish rentals market has experienced comparable price increases, with new tenancies commanding rent prices 11.2 per cent higher than this time last year.
The south east of England follows closely with prices 10.3 per cent higher over the three months to July 2015 than in the same period last year.
In London – where in cash terms the average rent on new tenancies is more than twice as high as in the rest of the country – prices continue to rise. New tenancies signed over the three months to July came with rents that were 9.5 per cent higher than in the same period of last year.
“Over the past few years, price trends in the rental market and house purchase market have been very similar. However, across the first half of this year house price growth has slowed whilst rental values have continued to increase, perhaps reflecting a change in the relative attractiveness of renting versus buying over this recent period” claims Martin Totty, chief executive of Barbon Insurance Group, which owns HomeLet.
“With early signs of the cost of mortgage finance starting to edge up, it will be interesting to see if this recent trend continues or if the change in buy to let mortgage interest tax relief announced in the Budget has any indirect impact on rental values with some suggesting it could further stimulate rental values over time if supply of rental properties is constrained as a consequence” he says.
