Posts with tag: average rent

Rental Competition is Pushing London’s Commuter Belt Further East

Published On: August 3, 2017 at 9:19 am

Tags: average rent,commuter belt,London,rent prices,tenants

Strong rental competition from tenants looking to leave the capital is pushing London’s commuter belt further east, according to the findings of the latest Landbay Rental Index.

Rents in the East of England grew by an average of 2.35% in the 12 months to July – the fastest rate of any UK region over this period and almost four times the average UK increase of 0.64%.

High rental competition for low-rent accommodation from long-distance commuters is thought to be a contributing factor, pushing rents up by more than 2% in eight of the ten counties in the region, and more than 3% in four of the ten.

Rental Competition is Pushing London’s Commuter Belt Further East

Of the capital’s five hottest commuter belt spots outside of the M25, four are located in the East of England. Luton (+4.23%), Peterborough (+3.75%), Thurrock (+3.56%) and Bedfordshire (+3.19%) all have average rents less than half the London average (£1,873), but have all experienced significant rental growth in the past year. In the capital, rents have dropped by 1.05% over the last 12 months.

The current pace of growth means that a tenant in Luton is now paying £789 for rent each month, compared to £757 a year ago, which is an extra £384 over the year.

The index highlights the growing affordability crisis facing young people working in the capital, suggesting that many are moving further afield to reduce their rent burden, possibly while they try to save for a home of their own.

Transport for London (TfL) recently revealed that Southern Rail trains are now the most overcrowded in the country, with some services carrying more than twice the number of passengers they were designed for. Meanwhile, new figures suggest that more young people than ever, particularly in London, are frustrated by the struggle to save and now feel like they will never be able to buy their own homes.

The study corresponds to recent research, which found that one in four young Londoners plan to leave the capital to buy their first homes.

Less affordable areas in London’s commuter belt – those with higher than average rents, such as the South East – have seen lower levels of rental competition and therefore slower price growth.

While the East of England has seen rental competition drive up prices, just three out of 19 counties in the South East have recorded rent price growth above 2%. It’s telling that those that have – Medway (+3.16%), Kent (+2.28%) and West Sussex (+2.03%) – all have more affordable average rents, at less than half the London average.

Indeed, the two counties in the South East with the highest average rents – Surrey (£1,439), and Windsor and Maidenhead (£1,270) – have both seen rents drop over the past year, by 0.13% and 0.23% respectively.

Elsewhere, already expensive areas surrounding the capital have experienced far lower rental growth. For someone living in Windsor and Maidenhead, traditionally deemed as a desirable location for commuters, rents have seen the greatest slowdown.

Average annual rent price growth across the UK slowed to 0.64% in July – less than half the 1.83% rate recorded last year. Outside of London, the pace slowed to 1.56%, with average rents reaching £756 per month.

Within the capital, especially central London, rents have now been falling for over a year – by 1.05% over the past 12 months.

The CEO and Founder of Landbay, John Goodall, comments: “With rising inflation and rock-bottom interest rates, it is little surprise to see demand in the more affordable Home Counties rising faster than pricier parts of London and the South East. Naturally, these surrounding areas are starting to experience a surge in rental prices, creating a ripple effect out from the capital. There are of course a number of factors at play, but as yields tighten in the capital, landlords may well be branching out to the East of England in a bid to meet this demand.”

Tenants should be wary, however, as new research claims that landlords are cutting back on how many under 35s they accept as tenants. This will only make rental competition more fierce, which will push rents even higher in high-demand areas.

London Rents Drag Down the Average Across the UK

Published On: July 5, 2017 at 9:41 am

Author: Em Morley

Categories: Property News

Tags: average rent,London,private rental sector,rent prices

London rents are dragging down the average growth rates for the rest of the UK, according to the latest data from HomeLet.

London Rents Drag Down the Average Across the UK

The figures show that newly agreed rent prices across the UK fell by 0.3% in June on an annual basis, to an average of £908 per month – the same rate recorded in May, when new rents dropped for the first time since December 2009.

London rents continue to record annual declines, falling by 2.6% in the year to June, to stand at an average of £1,524 per month – a long way from the 7.1% rate of rent price growth seen this time last year.

When London rents are taken out of the equation, new rents actually rose by 0.5% annually, to an average of £757.

Just five regions recorded a decline in rent price growth in June, with the East of England, South East, Yorkshire and the Humber and the North East also experiencing annual decreases.

On a monthly basis, most regions recorded growth, with just the East Midlands, South West and East of England experiencing drops.

The Chief Executive of HomeLet, Martin Totty, says: “It is now a full year since rental price inflation in the UK peaked at 4.7%, since when we’ve seen progressively more modest rent increases and, over the past two months, falls in some areas of the country.

“June’s figures are the first indication that this trend may now be beginning to flatten out, but it’s too early to say this with any certainty – the next few months will provide crucial intelligence on the direction the market is taking.”

The data contrasts to new figures released by Hometrack, which suggest that London rents are now at the most unaffordable level for ten years.

Recently, the Local Government Association (LGA) has also attacked private rents for being too high, reporting that one in seven tenants now spend more than half of their income on rent.

Calling on central Government to provide more support for the building of homes that families can afford, the LGA revealed that just 2% of homeowners spend the same proportion of their income on mortgages.

Number of Tenants with a Spare Bedroom Drops to Lowest Level on Record

Published On: November 14, 2016 at 9:38 am

Author: Em Morley

Categories: Property News

Tags: average rent,London,rent prices,spare bedroom,tenants

The number of tenants with a spare bedroom has dropped to the lowest level on record, according to the latest Lettings Index from Countrywide.

Just one in three tenants (35%) rented a home with a spare bedroom in 2016, down from a peak of 59% in 2010.

Number of Tenants with a Spare Bedroom Drops to Lowest Level on Record

In London, where rent prices are highest in the whole country, only 26% of tenants were able and willing to pay for an extra bedroom this year, down slightly from last year.

As rising rent prices have pushed the cost of an extra bedroom to an average of £295 per month, tenants have increasingly shied way from paying for space that they don’t absolutely need.

Tenants in the capital are the least likely to have a spare bedroom, however, the figure is very similar in big cities across the south of England. Less than three in ten tenants in Oxford (28%), Cambridge (27%) and Bristol (24%) have a spare room.

But in cities further north, such as Newcastle, Manchester and Liverpool (where the cost of an extra bedroom is much lower), tenants are almost twice as likely to have a spare bedroom.

Those living in city centre flats are a third more likely to have a spare room than their suburban counterparts, the research found.

Countrywide has also analysed the average rent prices across the country, finding that rents have risen by 1% in the past year – the slowest October increase since 2010.

London and the South East continue to bear the brunt of the slowdown, with rents in the capital up by just 0.2% in the last 12 months, while the South East saw a decline of 3%.

In October, the average London rent stood at £1,302 per month, compared to £1,300 last year.

In Great Britain as a whole, the average rent price for new lets is now £947 a month.

The Midlands, north of England and Scotland all experienced rent increases of more than 2% over the year since October 2015.

Johnny Morris, the Director of Research at Countrywide, comments on the findings: “As affordability pressures have risen, for many tenants, extra space has become a luxury. Sacrificing extra bedrooms and sharing has helped renters to absorb higher prices. But those living in the south are close to a point where there’s not much more room to squeeze, meaning rental growth is likely to be capped by tenants’ incomes for some time.

“The second half of 2016 has seen the rental market slowly swing towards the tenant. The pace of rental growth has slowed throughout the year. October was the first time in over two years the cost of renting a home didn’t rise faster than the rate of inflation.”

Number of Homes Let Above Asking Price Drops in Central London

Published On: September 12, 2016 at 8:42 am

Author: Em Morley

Categories: Property News

Tags: average rent,London,rent prices,rental property,rental supply,tenant demand

The number of homes let above the asking price in central London has dropped, according to the Countrywide Lettings Index for August.

Number of Homes Let Above Asking Price Drops in Central London

Just 8% of homes were let above the asking price in the capital, down from 17% in the same month last year. This is the lowest proportion recorded in August since 2011.

In Greater London as a whole, 13% of homes were let above the asking rent in August, down by 4% on the same period in 2015.

Nationally, the number of homes let above the asking price rose slightly, by 0.2%. Only Wales and the north experienced similar declines to London, by 3% and 0.3% respectively.

The index also found that the majority of rental homes are still let at the asking price, caused by a greater supply of private rental sector properties.

In Greater London, 76% of homes are now let at the asking price, up by 10% on last year. Meanwhile, 89% of homes in central London are let at the asking price, 20% higher than in August last year. Across the country as a whole, 78% of homes are let at the asking price, up by 13% on last year.

Supply in the private rental sector still remains high, which is reducing competition between tenants. Following both the Stamp Duty deadline rush at the beginning of the year and June’s EU referendum, supply has matched or grown faster than tenant demand across the country, particularly in the south.

Both London and the South East experienced growth in the number of homes to let in August, up by 26% and 22% respectively. This is faster than tenant demand growth, which rose by 8% in London and 3% in the South East over the same period. Contrastingly, supply grew by 26% across the country as a whole, while demand was up by 17%.

The average rent across the country is now £960 per month, although the lower rate of rent price growth that has been seen across most of this year so far has continued.

Rents in August rose by 1.5% on average, down from the 4% rate of growth recorded last year. In some parts of the country, this slowdown has caused rent prices to drop.

Rent prices in central London have fallen by 2%, while they dropped by 1.4% in the South East. In Greater London, which saw a decrease in rents in July, prices were up by 0.9% in August. However, this still marks the lowest annual growth rate rise since 2012.

The average rent prices for new lets across the country, as of August, are as follows:

[table id=25 /]

The Research Director at Countrywide, Johnny Morris, comments on the data: “In London and the South East, recent increases in the number of homes available to rent, outpacing the growth in tenants looking for a home, has meant that bargaining power is shifting towards tenants from landlords. This is slowing rental growth.

“Overall, slightly more tenants are offering above asking prices than last year. The majority continue to pay asking prices. Unlike the sales market, rental prices adapt very quickly to changes in market conditions, meaning asking prices are finely tuned to tenant demand.”

£500 a Month Room Rents in London Now Extinct

Published On: August 17, 2016 at 10:38 am

Author: Em Morley

Categories: Property News

Tags: average rent,London,rent prices,renting in london,room rents

£500 a Month Room Rents in London Now Extinct

It is now impossible to find £500 per month room rents in London, according to estate agent Portico.

The London estate agent found that although average rents dropped by 1.7% in London following the Brexit (between May to July), rents of £500 a month for a two-bedroom property in the capital are now extinct.

Portico’s data found that Bexley is the cheapest borough in London to rent a room, with the average rent price for a two-bedroom property in July standing at £1,108 a month, or £554 per room.

And tenants will pay even more if they live alone: Even in the most affordable borough, the average rent on a one-bed property in Bexley is £847.

On the other end of the scale, if you’re looking to live in the exclusive borough of Kensington and Chelsea, you’ll have to fork out a huge £3,989 a month in rent on a two-bed home, or £1,995 per room.

Across the capital as a whole, the average monthly rent on a two-bed property is £1,756, or £878 per room.

Average monthly rent for a two-bed property in all London boroughs

[table id=23 /]

The Managing Director of Portico, Robert Nichols, comments: “Many Londoners now consider renting as a long-term norm, as a result of rising property prices. It’s therefore good to know where you can find the most affordable rent – and our data lists the London boroughs’ two-bedroom rental prices from the cheapest to the most expensive.

“Bexley in southeast (£1,108) and Havering (£1,156) in the east offer the capital’s cheapest rents, and they’re soon to become well connected too, with stations planned on the eastern edge of the Elizabeth line. If you want to live in inner London, Lewisham offers the most affordable rent (£1,430).”

The latest figures from the estate agent further highlight the problem of sky-high rents in London.

Greatest Monthly Fall in Scottish Rents on Record

Published On: April 27, 2016 at 9:13 am

Author: Em Morley

Categories: Property News

Tags: average rent,rent arrears,rent prices,Scotland,tenants

Rent price data for March shows the greatest monthly fall in Scottish rents on record, according to the latest Scotland Buy-to-Let Index from Your Move.

The average private rent in Scotland dropped by 0.7% in the month to March, the sharpest monthly fall since the index began. It is also the first monthly decline in rents recorded since September 2015, when average rents decreased by 0.3%.

The £4 drop in rents between February and March takes the average rent in Scotland to £544 per month – Scottish rents have not been this low since May 2015.

The monthly drop also takes annual rent price growth down to 1.1% – a significant downturn from the 2.1% inflation seen in February. The annual price change is now at a 13-month low, equal to the 1.1% increase recorded in February 2015.

The Lettings Director at Your Move Scotland, Brian Moran, comments on the figures: “Those who signed a new tenancy in March will be feeling confident they snapped up a competitive deal, and will be enjoying a little extra cash in their pockets at the end of every month. It’s been a rare break for cover and it’s unlikely to hang about for long, as the Scottish rental market begins to gear up towards the annual autumnal peak.

Greatest Monthly Fall in Scottish Rents on Record

“Tenants in big cities like Edinburgh haven’t enjoyed the same reprieve at all, with the ratio of supply and demand still stacked greatly against them. Investment from landlords needs to follow the tune of the jobs market and economic activity.”

He continues: “Affordability is the main warning light to watch out for on the dashboard, and with the frequency of arrears on the rise once again, this reminds us of the considerable obstacles ahead. With landlords now facing an additional 3% Stamp Duty on property purchases, and the Private Tenancies Bill passed through Scottish Parliament, we’re entering unchartered territory. What we do know is that if landlords hit the brakes and cause a roadblock of supply in the private rented sector, tenants will be the casualties paying higher rents in the longer term.”

Rents in March were down in the majority of Scotland, with just Edinburgh and the Lothians recording a monthly rent rise. Rent prices in the region grew by 0.2% (or £1) to hit a new peak of £645 per month.

The greatest monthly decline was seen in Glasgow and Clyde, where rent prices dropped by 1.5% between February and March. This represents an £8 fall, taking the average rent to £544 a month.

The Highlands and Islands experienced a similarly sharp 1.4% fall, with rents in the East down by 0.8% on a monthly basis. The South of Scotland saw a more modest 0.2% downturn in rents over the same period.

Despite widespread monthly decreases in rents in March, the proportion of rent arrears in Scotland has risen for the first time since October 2015.

The level of rent arrears increased to 11.3% of all rent due in March – up from a seven-month low of 10.9% in February. On an annual basis, the proportion of late rent is up from just 8.6% in March 2015.

Moran says: “March has seen a very unwelcome about-turn in the direction of tenant finances. Up until now, Scottish tenants have been making good ground over the spring months, and paying down levels of late rent – but there’s still a mountain to climb for many households.

“External factors and the wider economic climate obviously have a vital impact on tenants’ bottom line and the delicate balancing act between monthly income and outgoings, but landlords on the ground can help keep a lid on affordability pressures too. Good management of buy-to-let properties and regular communication between landlords and their tenants is crucial to signpost any early concerns and avoid the likelihood of rental arrears.”

He adds: “Tenants need properties they can afford, and landlords need tenants with a healthy grip on their household expenses, so it’s about striking a fair deal for both.”¹

¹https://www.landlordtoday.co.uk/breaking-news/2016/4/biggest-monthly-drop-in-scottish-rents-on-record