The January HomeLet Rental Index presents some incredibly interesting data from across a number of regions in the UK. It’s revealed that most regions have seen an increase in their rental values over the past year. Here, we take a detailed look at what has happened to rental rates in the South East of England in the last 12 months, the scale of the changes, and a couple of reasons why this might be.
Jan-15 Rental Index headlines: regional data
• Most regions saw an increase in average rental values compared to last year, particularly Greater London (12.3%), Scotland (10.8%) and South West (7.3%)
• Greater London, South East and South West have seen a continuing increase in rental values over the last 12 months
• Regions to see reductions when compared to last year are Wales by 1.4% and the North West by 1%
Taking a look at the South East
Our January Index has revealed that the average rental rate for new tenancies in the South East in the three months to January 2015 stood at £870; a monthly variance of -0.5%.
This means that the South East remains above the average UK rental value in the three months to January when London is excluded from the data. This average rental value across the UK now stands at £702, £168 lower than the average rent for the South East during the same period.
Overall, over the course of the past year, rental rates in the South East have risen by 5.4%. The average rental rate in the three months to January 2014 was £825, £45 lower than the equivalent price in the three months to January 2015. Over the same period, average tenant incomes were 6.2% higher across the country than they were in 2014.
To put this rise into context, it should be noted that most regions saw an increase in average rental values compared to last year. This was particularly the case in Greater London (12.3%), Scotland (10.8%) and South West (7.3%). The two regions to see reductions when compared to last year were Wales by 1.4% and the North West by 1%.
Why might we have seen an increase?
In the South East and in London particularly, much of these rental rate rises appear to be due to a lack of housing stock and supply failing to reach the level of demand required. At the turn of the year we published an article on the government’s £51.6m pledge to build 5,000 homes in the South East of England as part of their Build-to-Rent scheme. It’s hoped that, in doing so, they will be able to counteract the shortage of homes in the region, with the home building scheduled to take place in Archway, Bethnal Green and Maidenhead, and completion dates set for 2016.
This shortage of housing can be seen through the great demand for homes in the South East. With good commuter links to the capital, the South East continues to appeal to tenants, particularly young professionals. However, it appears as though a lack of suitable properties alongside an ever increasing demand is currently contributing to increasing rental rates.
All figures taken from the HomeLet Rental Index and correct as of 05/03/2015
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