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London rents exceed £1,500pm for first time

Posted on 2015-06-15

LATEST FIGURES FROM HOMELET RENTAL INDEX SHOW UK RENTS ON THE RISE AND LONDON RENTS EXCEEDING £1,500 PER MONTH FOR THE FIRST TIME 

  • Rents have risen in all 12 UK regions in the three months to May 2015 compared to last year
  • The average rent in the UK for new tenancies in three months to May 2015 was £935 per month (£738 excluding Greater London)
  • The average rent for new tenancies in the month of May 2015 in Greater London was £1,506

New findings from the HomeLet Rental Index show that rent prices in every region of the UK are now rising, an occurrence only seen twice previously in the history of the Index; once in October 2014 and once in December 2010. The Index also reveals that the pace of growth in London has picked up again, after a period of slower growth, with average rents agreed on new tenancies in May 2015 exceeding £1,500 per month for the first time.

The latest HomeLet Rental Index figures show strong growth in rent prices across the UK since this time last year, with all 12 regions recording price rises compared to the same period a year ago. Rents agreed on new tenancies across the UK in the three months to the end of May 2015 were 10.7 per cent higher than the same time last year, with the average now standing at £935 per month (£738 excluding Greater London).

The South West of England saw the largest increases, with average rent prices 13.6 per cent higher than a year ago. Scotland (9.6 per cent), the South East of England (9.4 per cent) and Greater London (9.2 per cent) also advanced strongly.

In Greater London, the average rent now stands at £1,472 for the three months to May 2015, however, when looking solely at new tenancies agreed in the month of May, the average rent has exceeded £1,500 for the first time in the history of the Index. The average rent on new tenancies signed during May 2015 was £1,506 per month.

Annual variance comparison figures: Greater London vs rest of the UK

HRI 1

 

Annual variance comparison figures: Greater London vs rest of the UK

HRI 2

Commenting on the report, Martin Totty, Chief Executive Officer, Barbon Insurance Group, parent company of HomeLet, said: “Rental values are now increasing year on year across the country, with no exception. After a short period of London rents rising more slowly, when it seemed the rest of the UK may catch up or even exceed the capital in the speed at which rent prices were increasing, we now see the rate of price rises in London returning towards double digit growth, while the rest of the UK continues to rise steadily.”

HomeLet Rental Index regional rent price figures for the three months to May 2015

HRI 3

Martin Totty continued, “With the whole of the UK experiencing increases in rent prices agreed on new tenancies, it is possible this is an early indicator of a post-election private rental market where both landlords and tenants might expect rent prices to keep rising as demand continues to grow.”

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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