Rents on Tenancy Renewals Growing at Over Double the Rate of New Contracts

Existing Countrywide tenants are witnessing an increase in their rents, at over double the rate of new renters.

Figures provided by the agency’s branches revealed that the value of new tenancies at its branches during August was up 1% annually to £975 on average.

However, renters having their tenancies renewed at Countrywide experienced increases, with rents up 2.8% to £958 a month on average across the UK.

Wales witnessed the largest rise in rents on new tenancies, up 4.4% annually to £683, while outer London tenants saw a 4% increase on renewals to £1,587 on average.

Region Average New Lets Rent (pcm) New Lets YoY Rental Growth Average Renewed Lets (pcm) Renewals YoY Rental Growth
Greater London £ 1,702 -0.80% £1,765 3.20%
nner London £ 2,609 0.40% £2,705 0.80%
Outer London £ 1,530 -1.10% £1,587 4.00%
East of England £ 957 1.80% £914 3.50%
South East England £ 1,052 1.40% £1,014 2.80%
South West England £ 807 1.60% £778 2.40%
Midlands £ 689 3.30% £656 2.40%
North £ 648 1.70% £607 2.30%
Wales £ 683 4.40% £631 2.40%
Scotland £ 658 0.40% £631 2.40%
Great Britain £ 975 1.00% £958 2.80%
Great Britain (Excluding London) £ 789 2.00% £750 2.60%

HomeLet revealed rents on new tenancies increased by 0.9% in August to £947 per month, lower than the 1.3% annual growth reported in July.

When excluding London, the average rent in the UK is currently £786, up by 1.3% on last year, HomeLet claims.

The capital remained the area with the highest rents, at £1,632 monthly. This is up 1.4% annually and 1.1% on a monthly basis.

Moreover, Scotland saw the biggest annual monthly development at 5.6% and 2% respectively to £664 per month.

The North East experiences the biggest drops in rents, down 2.2% annually to £526, while Wales and the south-west and east of England also register annual declines.

Chief Executive at HomeLet, commented: “In contrast to house which show more noticeable cyclical variations over time, especially in areas of the country where the imbalance between demand and supply is more pronounced, UK-wide rents in August increased around 1% compared with both the prior month and the same month last year.
“Our data demonstrates that the rental sector is showing a return to the long-term trend of steady, often below-inflation price growth.
“This makes the private rental sector an attractive alternative to the risk of entering, or exiting, property ownership at the wrong point of the cycle for tenants, landlords and lenders.”

Region Aug-18 Jul-18 Aug-17 Monthly Variation Annual Varation
Northern Ireland £663 £653 £634 1.50% 4.60%
Scotland £664 £651 £629 2.00% 5.60%
Greater London £1,632 £1,609 £1,609 1.10% 1.40%
West Midlands £708 £701 £693 1.00% 2.20%
North West £717 £712 £703 0.70% 2.00%
East Midlands £639 £631 £617 1.30% 3.60%
Yorkshire & Humberside £645 £635 £630 1.60% 2.40%
South East £1,055 £1,041 £1,028 1.30% 2.60%
North East £526 £525 £538 0.20% -2.20%
Wales £617 £611 £626 1.00% -1.40%
South West £826 £818 £838 1.00% -1.40%
East Of England £913 £909 £926 0.40% -1.40%
UK Average £947 £937 £939 1.10% 0.90%
UK excluding Greater London £786

However, separate data from The Deposit Protection Service (DPS) claims tenants have seen rents fall annually for the first time since the global financial crisis in 2009, The DPS has used its own data to assess rental growth in the second quarter of 2018, finding rents in the UK fell 1.3% annually to £764 a month.
This is the first annual slide since the second quarter of 2009 at the time of the financial crisis. The DPS also found that rents in the UK have now fallen for two consecutive quarters, down 0.97% in the second quarter after a 0.54% slide in the first three months of 2018. This led the DPS to say the rental market was in recession, which seems like a strange way to describe cheaper rents for tenants.

Managing Director, Julian Foster at the DPS, said: “Following almost a year of low growth, the UK rental market is now in recession in almost every part of the country.
“On top of this, our prediction last quarter that rents would decline year-on-year in the second quarter for the first time since 2009 has proven accurate.
“There are clearly long-term issues with the sector that are having a substantial effect on growth, particularly in the capital, and it’s difficult to see this negative trend ending any time soon.”

Region average rent in Q2 2018 change since
Q1 2018 % change since
Q1 2018
London £1,289 -£36 -2.73%
South East £868 -£5 -0.56%
South West £724 £2 0.31%
East £801 -£7 -0.89%
East Midlands £583 -£8 -1.38%
West Midlands £616 -£9 -1.43%
Yorkshire £550 -£17 -2.95%
North West £595 -£1 -0.15%
North East £532 -£3 -0.48%
Scotland £646 £9 1.36%
Wales £577 -£2 -0.39%
Northern Ireland £542 £18 3.37%
UK £764 -£10 -1.30%