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HomeLet Reveals UK Rental Hotspots

Posted on 2015-01-19

  • Leicester, Southall and Cambridge show highest rental price growth in 2014
  • Colchester, Croydon and Brighton see biggest falls in rental prices in 2014
  • The average rent in the UK for 2014 was £867 compared to £813 in 2013
  • HomeLet Rental Index predicts rental market growth in 2015

New findings from the HomeLet Rental Index have revealed the highest and lowest growth towns and cities in the UK rental market during 2014. The HomeLet annual review of the rental market in the UK has identified hotspots in Leicester, Southall and Cambridge with average rents in 2014 being 45 per cent, 38 per cent and 24 per cent higher, respectively, than 2013. By contrast, rent prices have fallen by the greatest amount in Colchester, Croydon and Brighton compared to 2013, with rents on new rental agreements 24 per cent, 23 per cent and 18 per cent lower respectively in 2014.

The HomeLet Rental Index annual review has shown that on average, rents across the UK in 2014 were 6.6% higher than in the previous year with the average monthly rent in the UK now standing at £867. However, when analysed on a regional and local basis, the data reveals some marked differences in rental market performance.

HomeLet has ranked the major towns and cities in the UK to produce a league table highlighting the top ten growth hotspots and the bottom ten locations for rental market growth:

Top ten UK towns and cities with highest rental market growth in 2014

Bottom ten UK towns and cities with lowest rental market growth in 2014

 

City/Town

Rent price annual variance 2014 year to date/2013 year to date

 

City/Town

Rent price annual variance 2014 year to date/2013 year to date

 

%

2014

2013

 

%

2014

2013

Leicester

45%

£611

£421

Colchester

-24%

£539

£708

Southall

38%

£995

£719

Croydon

-23%

£441

£574

Cambridge

24%

£1,001

£808

Brighton

-18%

£441

£574

Gloucester

22%

£646

£529

Romford

-12%

£507

£578

Chelmsford

19%

£645

£451

Manchester

-7%

£557

£596

Swindon

18%

£738

£627

Cardiff

-5%

£462

£486

London

12%

£1,418

£1,262

Belfast

-3%

£530

£549

Telford

10%

£640

£583

Huddersfield

-2%

£524

£536

Ilford

9%

£797

£728

Lincoln

-2%

£497

£508

Harrow

9%

£940

£864

Leeds

-1%

£612

£620

 

Source: HomeLet Rental Index average rent figures for new tenancies in 2014 compared to new tenancies in 2013

Commenting on the report, Martin Totty, Barbon* Insurance Group’s Chief Executive Officer, said: “2014 was predominantly a year for growth in the rental market with rental prices on average 6.6% higher than in the previous year. With property prices continuing to grow, and mortgage criteria tightening, the rental market represents a much more accessible option for house hunters than the property ladder. The demand for rental property is increasing, and we expect it to continue doing so in 2015 as large numbers of people are priced out of buying. As a result, we expect to see continued growth in rental prices across the UK as the new year progresses, particularly as real incomes are starting to rise.”

“However, the data also points to some big differences in rental market performance in 2014 from town to town and city to city. The causative factor behind these differences is as simple as supply and demand. In, locations such as Leicester and Cambridge, demand for rental property is outstripping supply. By contrast, Croydon and some parts of Essex are benefitting from a relative boom in new property building, easing the pressure on the local rental market and this is reflected by a drop in rental prices.”

The monthly HomeLet figures for December 2014 point to a rental market that has seen largely positive growth throughout the year, even allowing for the typical end-of-year seasonal adjustment in the market. While rental prices fell in many regions of the UK in December, the annual variation figures for December are in positive growth for nine out of 12 UK regions.

Rental figures from the December 2014 HomeLet Rental Index

Region

December 2014

November 2014

Monthly variation

December 2013

Annual variation

Greater London

£1,393

£1,408

-11%

£1,244

12%

Scotland

£616

£638

-3.4%

£565

9%

North East

£532

£506

5.1%

£501

6.2%

South West

£802

£798

0.5%

£765

4.8%

South East

£867

£865

0.2%

£832

4.2%

Wales

£573

£581

-1.4%

£595

-3.7%

Northern Ireland

£559

£570

-1.9%

£541

3.3%

Yorkshire & Humber

£594

£603

-1.5%

£578

2.8%

West Midlands

£642

£651

-1.4%

£628

2.2%

East Midlands

£581

£614

-5.4%

£573

1.4%

East Anglia

£726

£748

-2.9%

£746

-2.7%

North West

£645

£635

1.6%

£676

-4.6%

 

 

 

 

 

 

Overall UK average

£867

£874

-0.8%

£813

6.6%

UK excluding Greater London

£694

£702

-1.1%

£684

1.6%

Notes:

source HomeLet

 

Based on new tenancies in Dec 2014

 

Based on new tenancies in Nov 2014

 

Monthly growth Nov-Dec 2014

 

 

Based on new tenancies in Dec 2013

 

Comparison of rent prices Dec 2013 to Dec 2014

 

 

HomeLet Rental Index Monthly Regional Variance Figures – December 2014

HRI Dec

About the HomeLet Rental Index

As well as information on rental amounts, the HomeLet Rental Index also provides information on tenant demographics, such as their average age, income, previous residential status and property type they’re applying to live in. In addition, data is gathered on how many people share a rented property –to get a real feel for the lifestyle of tenants and see how external factors, such as the lack of mortgages and increase in unemployment, are affecting how and where people live.

Data is gathered from HomeLet’s tenant referencing service, and rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs. Up to 1,700 applicants are referenced every day, so information in the report is extremely comprehensive, accurate and up to date.

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