Real EstateUK

UK rents grow by 5.8% on exceptionally high demand

UK rents

Nine of the twelve regions monitored by HomeLet showed a year-on-year increase in rental values between January 2020 and January 2021

Tenants are preferring locations which offer greater space amid the Covid pandemic. As a result, average rents have risen up to £839 (excluding London), reflecting a rise of 5.8% compared with the last year.

When London is taken into account, the average rent rises to £981 – a rise of 2.9% on last year, according to the latest data and analysis from HomeLet.

Nine of the twelve regions monitored by HomeLet showed a year-on-year (YOY) increase in rental values between January 2020 and January 2021. The South West saw the largest increase for the fifth month in a row (8%).

Rents in London continue to fall YOY, dropping 3.9% between January 2020 and January 2021 – the eighth decrease in annual variance in subsequent months. Rents in Northern Ireland are down 2.1% on last year – the fourth decrease in annual variance in subsequent months.

Compared with the last year, there was a YOY decrease in rental values in 11 of the 21 London borough groupings monitored by HomeLet.

In January the previous average tenancy for a tenant moving to a new home was two years and nine months, this was only marginally higher than last year when the figure was two years and eight months.

Along with rising rents, there was a 7% rise in the volume of fraudulent and suspicious tenant referencing applications in the past 12 months, the data revealed.

Andy Halstead, HomeLet CEO, comments: We’re seeing the value of the private rented sector’s responsiveness and the crucial role it plays in supporting the changing needs for people across the UK. The data continues to show that demand remains exceptionally high in many areas. The needs of tenants have shifted throughout the pandemic, creating upward pressure on locations that offer more space, both inside and outside the property.

Whilst rents are increasing; the expectation is that unemployment will increase further in the summer, undoubtedly leading to some tenants being unable to pay their rent. We’ve seen an exceptional demand for our rent protection products as agents look to safeguard their landlords and their management income. Landlords are concerned about the potential implications, should their tenant be impacted financially. Rent protection is a product that’s helping the industry to add value to the service provided to landlords, Halstead said.

He said that there are still millions of people on the Governments Furlough schemes, and many will need to move home. That’s why I think it’s essential that we continue to carry out checks on people who are on Furlough whilst still offering rent protection for eligible tenants.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Invest for Property. The information provided on Invest for Property is intended for informational purposes only. Invest for Property is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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