Rent Keeps Rising – But By How Much?
Headlines reporting record rental prices seem to come around every month or so, the effect of high property prices and the lack of affordable housing in the UK. Establishing just how much rental prices are rising by, though, is not easy. Several sets of data released in recent months have suggested rises of anywhere between 10 and 2 per cent on an annual basis.
The 10 per cent figure comes from research released by the letting agents HomeLet. Their rental index calculator suggests that Q1 of 2015 showed average rent in the UK has now reached £902 per month, up from £819 in the same quarter in 2014. Rent in London now stands at an average monthly figure of £1,427 with the rest of the UK at £720.
In 11 of the 12 regions of the UK surveyed there were rent rises, with the only exception being Wales where it dipped slightly. The London figure represents a rise of 8.9 per cent on the year – but more interestingly it is in the regions that HomeLet found the most significant price growth. The South-West saw rises of 13.7 per cent, to a monthly average of £851; Scotland saw increases of 7.5 per cent and the West Midlands of 7.1 per cent in Q1.
The official data from Office of National Statistics reported in the Financial Times is much more restrained. In the 12 months to March 2015 rental prices in the private sector were found to have risen by only 2.1 per cent across the UK, with London prices having risen 3.2 per cent.
Similarly, figures from Your Move and Reed Rains put the UK average monthly rent at £768, representing a rise of 3.7 per cent on last year’s figures – the fastest rate of growth for over two years and the result of over a million extra households using rented accommodation since 2010. Their figures suggest Eastern England saw the highest rate of annual price growth, with rises of 12 per cent. In contrast to the HomeLet figures they found no annual changes in prices in the South-West
The latest ARLA figures pointed to the South-East as the location of the most rental price rises. A total of 31 per cent of ARLA-registered agents reported an increase in prices during February, with 41 per cent of agents working in the South-East reporting rises. Their statistics do, though, confirm the HomeLet research in that Wales saw the fewest reported rises in the UK where only 13 per cent of agents seeing price growth.