Private Rental Sector Rents Continue To Rise
In 10 Out Of 12 UK Regions
New data published by HomeLet has revealed some UK private rental sector hotspots for property investors and portfolio landlords to consider.
In some areas of the UK PRS rents have continued to increase, despite all the doom mongering that is going on in the media, with rents increasing by the most in:
- Leicester – PRS rents up 45% on 2013
- Southall – PRS rents up 38% on 2013
- Cambridge – PRS rents up 24% on 2013
Meanwhile other parts of the UK witnessed the biggest falls in rental prices in 2014 on new rental agreements with the biggest rental price falls recorded in:
- Colchester PRS rents Down 24% on 2013 prices
- Croydon – PRS rents down 23% on 2013
- Brighton – PRS fall 18% lower than 2013 prices.
The HomeLet Rental Index annual review shows that on average, PRS rents across the UK were 6.6% higher in 2014 than they were in 2013, resulting in an overall fall in the cost of monthly rent paid by tenants in the UK’s private rented sector, with the average now standing at £867 (GBP).
The data released by HomeLet 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. Even with rental prices falling in many regions of the UK in December, the annual variation figures still show positive growth in 10 out of 12 UK regions.
Martin Totty, Barbon Insurance Group’s chief executive officer, said: “2014 was predominantly a year for growth in the UK’s 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 UK property 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 year progresses, particularly as incomes are starting to rise in real terms. 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 moderation in rental prices across the UK in December 2014 is broadly in line with the typical seasonal effect that often sees rental prices slow or move into negative growth towards the end of the calendar year. However, the annual comparison figures show that in all but two regions of the UK, rental prices are higher now than they were this time last year and this is a trend we expect to continue in 2015.”
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