Leeds saw the greatest increase in room rents of all UK cities in both the year to the first quarter (Q1) of 2019 and since the previous quarter, according to the latest Room Rental Index from ideal flatmate.
While London – unsurprisingly – remained the most expensive UK city to rent a room, with the average price rising to £745 per month, Leeds recorded the greatest increase in room rents.
ideal flatmate’s index looks at the cost of renting a room across the UK’s major cities. It found that Leeds recorded the highest growth in average room rents both year-on-year and on the previous quarter.
The firm analysed the cost of thousands of spare rooms listed on its platform, looking at the differing cost of renting across each major UK city and London borough, and how this has changed on an annual and quarterly basis.
The Room Rental Index for Q1 found that the average room rent price in the UK was £535 per month, which is up by 11% on Q1 2018.
Following London, Glasgow was the second most expensive UK city to rent a room, at an average price of £588 a month. Bournemouth (£575), Cambridge (£562) and Leeds (£548) were close behind.
While only ranking as the fifth most expensive room rents, Leeds tops the table for both quarterly and yearly growth, with prices up by an average of 32% and 50% respectively.
Tom Gatzen, the Co-Founder of ideal flatmate, comments: “A new year, but a similar story where the UK rental market is concerned, with the cost of renting continuing to climb as a result of the imbalance between high demand and insufficient stock levels.
“This trend is almost certain to persist over the coming year, and the impending tenant fee bancould see this growth spike further, as rental costs are used to recoup lost revenue.”
Landlords can maximise their rental returns by investing in the property market in Scotland, according to new data from Your Move.
Your Move Scotland reports that the average rental yield for investors with properties north of the border increased for the first time since March 2017 in March this year.
The letting agent found that average rental returns in Scotland stood at 4.7% in March, which is up from 4.6% in the previous month.
As a result, rental returns for landlords with properties in Scotland are now at a six-month high. This contrasts to England and Wales, where yields have held steady, at an average of 4.3%.
The only two regions in England and Wales to offer rental returns higher than the Scottish average during March were the North East and North West, at 5.0% and 4.8% respectively.
Brian Moran, the Lettings Director for Your Move Scotland, says: “Investors in Scotland have seen stronger returns this month than in February.
“This is the first rise in monthly yields since March 2017, and demonstrates why many investors from elsewhere are now looking towards Scotland to maximise returns.”
According to the firm, the average rent in Scotland increased by 1.8% in the 12 months to March, to reach £580 per month.
The Highlands and Islands recorded the greatest rise, taking the average rent price to £688. This is up by 4.9% on March 2018, but growth has slowed from the double-digit increases seen last year.
The only region to record higher rents was Edinburgh and Lothians, where the typical price was £699 in March. This followed a 4.6% year-on-year rise.
Elsewhere, rents were up by an average of 1.4% in the East of Scotland, and 0.9% in Glasgow and Clyde. A typical rent price in the East was £541 in March, while Glasgow’s was £589.
The South of Scotland was the only region to see rents fall on an annual basis, dropping by an average of 1.9% in March, to £537 per month.
Across Scotland as a whole, the average rent rose by 1.8% in the 12 months to March, to hit £580. This is up by 0.2% on a monthly basis.
However, Your Move Scotland’s data also shows that the proportion of rental households in arrears increased modestly in March. Some 10.7% of all tenancies were behind with their rent payments in the month – up on the 10.5% recorded in the previous month. Despite this, the level of arrears is still below the 11.2% seen in December 2018.
On an absolute basis, the amount of households in serious arrears – defined as two months or more – was 8,283 in March.
Moran adds: “With more tenants now renting for longer, thanks to the introduction of the PRT [Private Rental Tenancy], landlords are benefitting from the increased security and stability provided by these tenancies.”
Brexit uncertainty is failing to hinder the Scottish rental market, according to the latest Quarterly Report from letting portal Citylets, covering the first quarter (Q1) of the year.
Rent prices in the Scottish rental market continued to edge upwards in Q1, despite the political landscape, which has affected markets in other sectors. The average home to let in Scotland now costs £793 per month, following a 1.7% rise.
One and two-bedroom properties charted a familiar course, both recording positive annual growth in rent prices. However, mixed signals at the local level were recorded, especially in Scotland’s central belt.
Overall, the market operated at the same speed as in Q1 2018, with the average property taking 37 days to let.
Gillian Semmler, the Communications Manager for Citylets, comments: “Scotland’s private rented sector operated broadly to expectation against the underlying political chaos defining the Q1 period. There have been indications of a slower moving market, especially in Edinburgh, but certainly not as marked as in other property or, indeed, business sectors. More choice for tenants in the capital sees more tenants taking time to view multiple properties before committing. As a result, average time to let has increased by three days.”
Edinburgh
It now costs a record high of £1,115 per month to rent a home in Edinburgh, with a backdrop of lengthening time to let. This is consistent with anecdotal evidence from local agents of tenants shopping around and taking advantage of the increase choice in the market.
Q1 2019 saw properties take an average of 30 days to let – three days longer than in the same quarter of last year.
Rent price growth of 5% will once again cheer landlords and concern tenants, however, this is a lower rate of growth than previous quarters, with the time to let hinting at a possibly softening market, after more than nine years of annual growth each quarter.
Brexit Fails to Hinder the Scottish Rental Market
Glasgow
Tenants in Glasgow have also been reportedly shopping around before committing to a rental home. Nonetheless, the figures for Scotland’s largest city remain stable, with rents up by a modest 2.9%, to an average of £771 per month, while the typical time to let was unchanged on last year, at 31 days.
Rents on three-bed properties rose by a significant 8.6% on Q1 2018, whereas four-beds fell, by 7.1%. Volatility in the data for larger properties, however, is not uncommon, given the lower volumes reported each quarter.
Glasgow’s main one and two-bed property markets continued to record strong rent price growth, at 5.3% and 3.0% respectively. 58% of all Glasgow properties are currently let within one month.
Aberdeen
Falls in rent were reported for all property types in Aberdeen in Q1 2019, however, at -3.5%, the rate of decline continues to ease. With re-let times continuing to reduce, it is fair to view the figures for Q1 as positive overall for landlords.
One-bed homes fared best over the period, with rent price growth of -2.5%, an average time to let of 49 days and 41% of properties let within one month.
A typical property in Aberdeen now costs £710 per month and takes 54 days to let – four days faster than in Q1 2018.
Dundee
Dundee started 2019 where it left off, as rents continued to move upwards, albeit at a modest 1% rise over the past year. The average property costs £620 per month and takes around a month-and-a-half to let, at 43 days.
As with other cities, the market data for Dundee was conflicting, recording declining rents for one and two-bed homes, but improved re-let periods. Rent prices for three and four-bed properties continued to climb annually.
West Lothian
Rental properties in West Lothian continue to enjoy strong demand, seeing average prices rise once again – by 3.5% in the year to Q1, to reach £710 a month.
The signs for this popular commuter belt region look positive for landlords, with the time to secure tenants falling notably, to just over a month, at an average of 34 days.
Andrew Meehan, of estate agent Rettie & Co., assesses the Scottish rental market: “The rental markets in Scotland’s two largest cities continue to experience high levels of demand, driving continued growth in achievable rental values at the start of 2019. Over the first quarter of the year, despite increasing stock levels in both markets, enquiry levels, especially in city centre locations, continue to outstrip supply, fostering market competition and supporting values.
“In the rural rental market in Central Scotland, demand from families, who in recent years have been increasingly considering renting over buying, have continued to seek out the right family home for longer tenancies.”
The average cost of renting a room in the UK has increased by 3% (£15 per month) since the first quarter (Q1) of 2018, taking a typical rent to £582 a month, according to SpareRoom’s Q1 2019 Rental Index.
While house prices are coming down, rent prices are on the up in all regions of the UK. London, Northern Ireland and the West Midlands recorded the greatest jumps in the year to Q1, at an average of 4%. Despite its proximity to the capital, the South East saw the lowest growth (2%), followed by the South West (3%).
Looking on a town/city level, the greatest surges in the cost of renting a room were seen in the north of England, with Lancashire’s Preston taking first place. Rent prices in the city rose by an average of 8% (£30) on Q1 2018, bringing a typical rent to £378 per month. York and Stockport were close behind, with average increases of 7%.
At the other end of the spectrum, Southend-on-Sea, Aberdeen and West Bromwich were at the bottom of the table, with declines of 5%, 3% and 3% respectively.
Oxford follows London as the UK’s second most expensive location to rent a room, at an average of £572 per month. This follows a modest 1% rise on Q1 last year. University hotspots Reading and Edinburgh were third and fourth, with average prices of £530 and £519 respectively.
Contrastingly, the cheapest rents can be found in Belfast (£312), Sunderland (£319) and Middlesbrough (£327).
Contrast to the traditional north-south divide seen in England, London has its own east-west divide, with many of the capital’s cheapest room rents located east and southeast, while the more expensive rooms are located in the west and southwest.
Unsurprisingly, central St Paul’s (EC4) is the most expensive location to rent in London (£1,336 per month), despite the cost of renting a room falling by an average of 7% over the past year. South Kensington/Knightsbridge (SW7), at £1,177, and the Stand/Holborn (WC2), at £1,157, were close behind.
However, there’s still hope, as the cost of renting a room varies widely across London, with 17 areas available for under £600 per month, including Abbey Wood (£531), Manor Park (£541) and Chingford (£542).
Matt Hutchinson, the Communications Director for SpareRoom, says: “House prices may have stalled, but rents are on the up again. The ongoing Brexit mayhem might be putting people off buying or selling, but renters still need to move.
“With that in mind,it’s no surprise London continues to show solid growth, but if this 4% rise is a reflection of what’s to come, we’ll see renters hit their affordability ceiling and be forced further out the capital, especially as Crossrail, when it’s finally complete, likely to drive rents up in the east and southeast of London.”
The average rent price in England and Wales remained flat in the 12 months to March, reaching £860 per month, according to the latest research by Your Move.
Rent prices in the South West continue to rise faster than all other regions, at an average of 3.6% in the year to March, to hit £701 a month.
Other regions to record strong growth include the West Midlands, where rents increased by 3.3%, to reach an average of £638, and Yorkshire and the Humber, where rents stand at an average of £589, following a 2.3% rise.
At the other end of the spectrum, the East of England saw the sharpest decline, at 2.0% over the 12 months to March, taking the average rent price to £875 per month.
Rents dropped by an average of 1.3% in London over the same period, but, with the typical price standing at £1,260 a month, the capital remains by far the most expensive region to rent a home in England and Wales.
Month-on-month, the East of England and North East both saw rent prices fall by an average of 0.3% – the only two regions to post such a decrease.
The North East remained the cheapest place to rent in March, at just £539 a month.
The average rent price in England and Wales as a whole fell by 0.1% between February and March.
Perhaps unsurprisingly, therefore, tenant finances remained solid last month, with the proportion of renters struggling with their finances remaining at 9.4% in March.
Martyn Alderton, the National Lettings Director of Your Move, says: “Yields continue to perform strongly, with just one region offering lower returns this month than in February.
“We continue to see landlords in the south of England looking further afield for their next rental opportunity, as northern properties deliver stronger yields.”
He continues: “The growth of the urban rental market has created yield hotspots for private landlords in northern cities like Manchester and Liverpool.
“Universities in these major cities are attracting students from across the country. Young professionals are also increasingly relocating to the north. The investment in infrastructure and culture, for example, the relocation of the BBC and ITV to Manchester, has undoubtedly boosted the desirability of the city among this group.”
Landlords, are you keeping your rent prices steady? At the same time, have you seen your yields perform strongly?
ARLA Propertymark has issued its March Private Rented Sector (PRS) report, showing an increase in rental stock availability.
Rental stock supply and tenant demand
The available supply has risen to 203 properties per member branch during March, up from 196 in February. This is the highest ARLA Propertymark has reported since records began in 2015.
The year-on-year results show that supply is up 13%, compared to 179 per branch in March 2018. The demand from prospective tenants has also seen an increase, with the number of those registering per branch rising to an average of 67, compared to 65 in February.
Rent prices
Rent rises have fallen marginally in March for tenants, with 30% of agents reporting an increase by landlords. This is compared to 34% in February.
Year-on-year, ARLA Propertymark have reported this figure to be up 30%, from 23% in March 2018:
Landlords looking to sell
The number of landlords looking to sell their buy-to-let property and exit the market in March has remained at four per branch. This is up from three per branch last year.
David Cox, ARLA Propertymark Chief Executive, said: “Whilst its really positive that the number of properties available per branch hit a record high last month, this may be the first signs of the industry consolidating ahead of the tenant fees ban as agents either sell-up or merge.
“This, coupled with landlords exiting the market and rent costs continuing to rise, means the overall picture is far from positive for renters.
“The full effects of the tenant fees ban have not yet been felt, and now the Government is introducing yet more new legislation which will deter new landlords from entering the market, such as abolishing Section 21.
