All-Time Highs in the Private Rented Sector
The estate and lettings agents Your Move and Reed Rains reported record rental prices in April and May of this year on an annual basis. They surveyed 20,000 properties on the rental market across England and Wales and found annual rates of growth and rental costs at levels not seen since they began watching the market.
The average rental price in April reached £774, the highest ever recorded by the agents. This was an increase of 4.6 per cent on the figure from April 2014, and representing the fastest rate of growth since 2010.
Eastern England was the region seeing the fastest growth rate on an annual basis at 12.5 per cent, outstripping even London where increases stood at 7.8 per cent on the year. Curiously, the next highest increases were in Yorkshire and the Humber at 2.2 per cent only, rather than rental hotspots like the West Midlands, where Birmingham has a burgeoning rental market.
Similarly in May prices rose to an average of £778 across England. That represents a 4.5 per cent rise on the same month in 2014, with once again Eastern England seeing the greatest rises. In the region there were rental price rises of 13 per cent on the year, with the average price sitting at £819. The London market saw rises of 7.4 per cent on the year to an average of £1,207.
Beyond these two regions, though, rises were less notable. The South-East, typically an area of strong rental demand, saw rises of 3.6 per cent. In the West Midlands rises were only 0.9 per cent, 1.4 per cent in the South-West, and 1.6 per cent in Yorkshire and the Humber.
And in Wales, the North-East and the East Midlands prices dropped, in the case of Wales dropping by 2.8 per cent to an average price of £556. The drops in the East Midlands and North-East were less severe, to averages prices of £571 and £511.
Prices aren’t shifting upwards universally, then. Nevertheless, the general picture is of general rental price rises. Why is this? The economic upturn is partly responsible. Earnings are growing, along with levels of employment. This has increased the amount of competition for rental properties.
At the same time one the market is still defined by the lack of affordable housing – and will be for the foreseeable future. This remains the root cause of so much of the demand for rental properties in the UK, especially in those regions where prices have risen most sharply – London and the eastern cities like Cambridge and Norwich where there are concentrations of young professionals.