According to the findings of our latest Rental Index, the difference between the growth rate of the London and national rental markets has started to thin. Whilst London’s average rent prices remained stable in the three months to February 2015, prices in the rest of the country generally increased.
Our figures for February 2015 show that the average rent in the UK is now £899, in comparison to £889 at the end of January 2015 and £873 in December 2014. High house prices and the difficulty many first-time buyers are having in acquiring a deposit/mortgages means that the private rented sector (PRS) is stronger than ever, with more people now opting to rent for the long-term.
This strength can be seen across the country, with seven out of twelve regions in the UK witnessing rent prices go up in the three months to February 2015. The North East and South West of England led the charge, recording 3.1% and 2.5% price growth respectively. Growth was also seen in East Anglia, the North West of England, Northern Ireland, the South East of England and Yorkshire & Humber. On the other hand, prices stalled in Greater London and the West Midlands, and fell in Wales, the East Midlands and Scotland.
As for new tenancies beginning in the month of February 2015, prices increased on January 2015 in a number of regions. In Northern Ireland prices grew by 7.2%, in the North East of England by 6.2%, the South West of England by 4.5%, and East Anglia by 3.7%.
Alternatively, rents agreed on new tenancies in London in February 2015 fell by 2.5% on the previous month. Similarly, prices agreed on new tenancies in February 2015 fell in Scotland, the East Midlands and Wales in comparison to January 2015.
While 2014 saw the London rental market outdo the rest of the UK when it comes to rent price growth, 2015 has so far seen the other regions catching up. The strongest rent price growth is now taking place outside of the capital, suggesting that the power of the PRS is spreading to a countrywide audience.
Even though price growth in London would now appear to be slowing, a recent survey we carried out with letting agents in the capital highlighted that demand for private rental property remains high and still outstrips supply, with 80% of agents stating there are more tenants than properties available.
This, alongside the rising demand and rising rent prices seen across much of the country, will offer great encouragement to people thinking about becoming landlords as well as existing landlords looking to expand their portfolio. With more people heading down the buy-to-let route in certain areas, the need for good, reliable letting agents will only increase.
All figures from HomeLet’s Rental Index, correct as of 30/03/2015