By Average UK rents increased by 2.1 per cent in the year to October 2018, according to data from HomeLet’s October Rental Index. The study revealed that the UK’s average monthly rent in October this year came to £928.
However, the data revealed a disparity between average UK rents and those in the capital. The average monthly rent in London came to £1,619. In fact, London’s average rents soared 4 per cent in the 12 month period, according to the HomeLet report.
When London’s data is taken out of the equation, the average UK rental value was up 1.7 per cent, standing at £768.
The data revealed by the October Rental Index found that rents have increased in 11 out of 12 regions included in the report. The UK region that saw the highest year-on-year growth in rents was Northern Ireland, which jumped 4.5 per cent to £653, while average rents in Scotland rose 4.2 per cent to £647.
HomeLet chief executive, Martin Totty, commented on October’s Rental Index data: “Average UK-wide rents continue to increase year-on-year broadly in line with the current rate of inflation and the growth in average wages, meaning affordability in most parts of the country is little-changed.”
London’s rents remain strong
The rise in London’s rents clearly signals some good news for landlords with London properties, as rents continue to be much higher on average compared to properties in other regions of the UK. The rental market in the capital city continues to remain a strong area for potential investors and London’s landlords.
Mr Totty expanded on the capital’s results: “The exception is London and the South East, where average rents have increased above both inflation and average wage growth.
“In contrast to house price trends in this region of the country, activity levels in the private rented sector remain resilient.
“Landlords committed to the sector here seem able to command higher rents, potentially providing some offset to the negative headwinds of taxation changes some will have experienced.”
London rental growth may have slowed in the last six months, keeping in pace with the rest of the UK, but the rental market in the capital remains strong compared to London house prices. As recent data from Knight Frank demonstrated, in September 2018 there was a fall in supply of rental properties in prime central London causing residential rents to rise by 1.1 per cent across these locations.
The UK regions report
In the regions, Northern Ireland’s average rents witnessed the highest year-on-year increase of 4.5 per cent totalling £653, which could signal a new hotspot for property investors seeking to increase their portfolios. Scotland was another region which saw a positive increase in the average rents of 4.2 per cent, pushing rents up to an average of £647, according to the 2018 October Rental Index.
It was a different story in the North East where properties saw their average rents fall year-on-year by 2.5 per cent to £515 and they have also fallen month-on-month at a rate of 0.8 per cent.
In the South East, HouseLet reported a decrease in average rents between September and October 2018 with rents dropping 3.2 per cent to £1,010, although they saw an increase in year-on-year of 3.4 per cent. Other regions which saw a fall in month by month rents were Yorkshire and the Humberside at 2 per cent, the North West by 1.6 per cent, the West Midlands at 1.1 per cent and Scotland by 2.4 per cent.
Things were a little steadier over in the East of England where average rents fell by just 0.8 per cent between September and October.
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