Posts with tag: rent prices

Latest ONS Index reports year-on-year rent price growth for UK

Published On: February 21, 2020 at 9:33 am

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UK house prices see ‘marginal decline’ in October 2021

The January 2020 Office for National Statistics (ONS) Index of Private Housing Rental Prices, UK has now been published, showing only a slight increase. 

The main points of the report highlight that:

  • UK rent prices grew by 1.5% year-on-year
  • This 1.5% increase is up from 1.4% in December 2019
  • Private rental prices grew by 1.5% specifically in England. In Wales, they grew by 1.3% and in Scotland by 0.6% in the 12 months to January 2020
  • Landlords in London saw private rental prices grow by 1.3% in the same time period
  • The largest annual growth in England was in the South West (2.3%), followed by the East Midlands (2.2%) The lowest was in the North East (0.6%), followed by the North West (1.1%)
  • There has been a long-term UK increase of 8.6% between January 2015 and December 2019

The Residential Landlords Association (RLA) has pointed out that these increases are less than inflation.

Hedi Zidan, Founder and CEO of Nestify, a proptech lettings agent in the UK, comments: “Today’s figures demonstrate that the UK rental market is resilient and that demand remains strong. 

“Our landlords are increasingly meeting tenants who are seeking a range of different accommodation solutions, durations and tenancy options. This means that in order to maximise the current UK housing stock, it’s vital landlords have access to a range of short, medium and long-term rental options. 

“These figures demonstrate how integral professional landlords are to UK housing and it is our belief that they should be supported to provide the range of tenancies that the UK rental population so clearly crave.

Young Brits are Leaving London Faster Than Ever

Published On: February 19, 2020 at 10:43 am

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Young Brits are Leaving London Faster Than Ever

London is becoming decreasingly popular with young adults, mainly due to ever-ballooning house prices and rents.

The capital sees house prices averaging around £540,000, more than double the national average of £258,270, and as a result, each borough in London now sees the number of 18-34-year-olds decrease each year.

On average, London boroughs have seen a decrease of 2.75% or 2,000 18-34 year-olds in the last seven years. Hammersmith and Fulham has seen the biggest effect of this young people exodus, with a 5.39% decrease since 2012.

9 of the top 10 areas across the whole country to see population decreases in under 35s are in London, with the tenth being Slough, just 20 miles from the capital. 

With London’s young people bust, comes a boom for many other cities. Research by Good Move, using ONS data has revealed that Coventry is coming out on top, with a 3.65% increase in under 35s since 2012, now representing 32% of the city’s population.

Coventry’s popularity has been put down to lower than average house and rental prices, and excellent broadband and 4G speeds, which tends to draw in young professionals. 

Good Move’s online interactive tool First Home Hot Spots, which helps young people and first-time buyers see the locations which are growing in popularity with their generation. The tool shows where populations of 18-34-year-olds are increasing, alongside other useful statistics, such as average house prices, the number of jobs available and average salary.

The top 10 UK hotspots for young people that are seeing the largest relative increases in their population of 18-34-year-olds are:

1)    Coventry – 3.65%

2)    Bath and Somerset – 2.72%

3)    Exeter – 2.4%

4)    Canterbury – 2.24%

5)    West Lancashire – 2.04%

6)    Runnymede – 1.97%

7)    Guildford – 1.79%

8)    Newcastle-under-Lyme – 1.74%

9)    Bristol – 1.69%

10) Welwyn Hatfield – 1.61%

Ross Counsell, director at Good Move, said: “Young people bring money, innovation and life to a city and our research has highlighted the places currently benefiting from their interest.

“Buying your first home is a huge deal, with so many factors to consider. This is why we created our new online tool, as it clearly shows how different regions compare in the areas most important to young people.”

Londoners Spend Less Time Living in One Place Than Any Other City

Published On: January 30, 2020 at 11:13 am

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Unsurprisingly, Londoners Spend Less Time Living in One Place Than Any Other CIty

As part of a study into how happy British Homeowners and Renters are with their homes, the top cities where people don’t like to stay in the same house for too long were identified, and London came out on the top of the list.

More than 2,300 Brits took part in the survey, conducted by Duette which was aimed at homeowners and renters. When asked how long they typically rented a property for before moving on, the below cities in the UK were found to be the top movers who don’t like to stay in the same house for too long:

  1. London – 1 year (on average)
  2. Manchester – 1 year and 2 months
  3. Birmingham – 1 year and 6 months
  4. Nottingham – 1 year and 8 months
  5. Cambridge – 2 years
  6. Oxford – 2 years and 3 months
  7. Liverpool – 2 years and 5 months
  8. Newcastle – 2 years and 6 months
  9. Cardiff – 2 years and 10 months
  10. Bristol – 3 years

What’s more, almost two thirds of renters (63%) say they are satisfied with their current home, but almost a fifth (18%) are actively looking for a new place.

Affordability was found to be the top reason for wanting to move on (35%), while others say it was in order to move closer to work (28%) or for a better social life (17%). A lucky 10% move because they can afford to spend a little extra and live somewhere nicer. 

Almost a third say that the only thing keeping them in their current home is that they are tied in by contract, so can’t leave any earlier. 

Finally, nearly half (48%) of Britons who are currently renting are hoping to buy their own house in the near future, but 33% don’t believe they’ll ever be able to afford to buy their own home. 

Ashleigh Noon, spokesperson for Duette, commented:

“Renters are always going to move around more often than homeowners, purely because they have the luxury to be able to do so, whether that’s to move into a nicer home or to save money on what they’re already paying. While it’s great to hear that so many renters hope to own their own home one day, it’s a sad reality that one in three don’t believe they will ever have enough money to be able to buy – something that many Britons feel. Although, what’s interesting is that we are one of the few countries where buying a property is such an important life goal.”

Number of tenants negotiating rent reductions reaches all time low

Published On: January 29, 2020 at 9:58 am

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tenants negotiating rent reductions

A recent survey from ARLA Propertymark highlights that the number of tenants negotiating a rent reduction fell in December 2019.

It went from an already low 1.6% in November to 1.1%, making it the lowest figure since records began in January 2015.

It has also been noted that the number of agents witnessing rent increases remained at 32% in December. However, year-on-year results show that this is still a massive increase on December 2017 and 2018, as shown by this chart from ARLA:

Average number of tenants experiencing rent hikes in December year-on-year
Source: ARLA Propertymark

Demand from tenants

As well as a slight dip in negotiations, demand from prospective tenants fell last month. ARLA Propertymark recorded 56 prospective tenants registering per member branch in November, down from 67 in November.

Demand from prospective tenants has also fallen for member branches for the third consecutive month.

Supply of rental stock

Looking at available stock on the market, these results are more positive. The number of properties managed per branch rose last month from 203 to 206.

Year-on-year supply is also up from 200 in December 2017 and 193 in December 2018.

David Cox, ARLA Propertymark Chief Executive, has commented: “Since the tenant fees ban came into effect, our data shows that rents reached an all-time high last year.

“While we have seen a slight drop in the number of agents witnessing landlords increasing rents since then, overall rents remain high and now it seems that tenants are finding it harder than ever to negotiate a reduction in rent. 

“As rents continue to rise, tenants will find it even more difficult to find suitable accommodation. Now that we have a new government in place, it’s important that long-overdue legislative changes are implemented to make the market attractive again for both tenants and landlords.”

Zoopla: There’s room for growth in rent prices

Published On: January 23, 2020 at 10:46 am

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Zoopla: There's room for growth in rent prices

It is now generally more affordable to rent a property when compared to previous years with rental costs increasing below the level of earnings growth.

The report from Zoopla shows that despite the widening imbalance between supply and demand in the private rental sector (PRS), average wages have increased at a faster rate than the average price of renting a property, meaning that renting is now more affordable. 

Average UK rents increased by 2.6% to £886PCM in December 2019, but average earnings have increased by 3.8% according to the ONS.

In terms of how much of their salaries renters spend, this translates to the average renter spending 31.8% of their wages on rent, which is down from the 2016 peak of 33.6% according to Hometrack. 

Richard Donnell, research and insight director at Zoopla, commented: “The scope for landlords to increase rents is greater when earnings are rising faster than rents and this has been the case for the last three years. The positive news for renters is that the growth in rents is running below the growth in average earnings.” 

This isn’t the case for all of the UK though, at a city level, Nottingham is seeing a very high rate of growth in rents, with a 5.8% rise in the past year. York and Bristol are also seeing growth of above 5%. 

Rents in London dropped between 2017 and 2018 due to weaker demand, but they are now increasing by +2.8% – the highest rate for almost four years, owed largely to a 20% drop in housing supply in the PRS over the last two years. 

Donnell added: “A lack of supply and real wage growth is behind the increase in average rents across the country over 2019. 

“New investment by landlords has fallen since the introduction of tax changes in 2016 and this has been felt most keenly in southern England where property values are highest and yields lowest. This is creating scarcity and explains why rents are rising in the face of increased rental demand as levels of employment continue to grow.” 

He believes that more growth can be expected in 2020:

We expect rents to increase by 3.5% over 2020 as a lack of supply supports faster growth. 

“With further policy changes expected from the Government to provide more security of tenure for renters we expect the supply of rented homes to remain constrained, which will support rental growth over 2020. With robust earnings growth, the impact on rental affordability will be muted.”

Higher wages and lower deposits take sting out of renting, say The DPS

Published On: January 23, 2020 at 9:22 am

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Higher wages and lower deposits

Despite increased rent prices, new research shows the proportion of income spent by tenants on rent decreased between 2016 and 2019.

As part of The Deposit Protection Service’s (The DPS) latest Rent Index, rent levels were compared across the country with average salaries. The results show that the average proportion of wages spent on rent fell from 32.64% in 2016 to 30.64% in 2019.

Various factors have been noted by The DPS that helped to improve the affordability of renting during this period. The deposit cap introduced in June 2019 is one example, leading to a £77 decrease in average tenancy deposits. There was also a 2.69% increase in average salary.

The DPS Rent Index also revealed that average rents reached a peak of £777 during the third quarter of 2019 (Q3 2019). It then decreased marginally by £4 to £773 during the following quarter.

Matt Trevett, Managing Director of The DPS, said: “Although rents have risen over the past decade, other changes since 2016 have helped ensure renting has become on average more affordable. 

“Predictions that rents would rise in response to the introduction of the tenant fees ban and deposit cap do not seem to have materialised, with many landlords seemingly declining to increase rents since last summer.” 

Paul Fryers, Managing Director at specialist buy-to-let mortgage provider Zephyr Homeloans, said: “Although the longer-term recovery in rental levels is likely owing to broader economic factors, changes to rental figures are also more likely at moments where property changes hands.

“Over the last couple of years, professional landlords have become a larger proportion of the buy-to-let market as more and more smaller or ‘accidental’ landlords sell up, partly as a result of increasing costs.”

The biggest increase was recorded in Northern Ireland for average monthly rents (3.01%), from £532 to £548 during Q4 2019.

Yorkshire and The Humber saw the biggest decrease in average monthly rent prices, from £551 to £524 (4.90%).

Unsurprisingly, London continues to be the most expensive rental region in the UK. The average monthly rents in the capital stood at £1,345 in Q4 2019. This is over two and a half times the amount paid in the North East, which is the UK’s cheapest region at an average of £518.

The report shows that if we exclude London, the average monthly rent during the final quarter of 2019 was £672.

Detached properties saw the largest increase at 0.81%, going from £990 to £998 in Q4.

Terraced houses saw a decline in monthly rents during Q4. They fell from 0.55%, from £732 to £728.

 Rent as % of wages in 2019Average Salary 2019Average Rent 2019
UK30.64%£30, 353£769
London40.97%£38,992£1,321
SouthEast32.83%£32,120£872
SouthWest31.10%£28, 654£737
East32.40%£30,345£813
East Midlands25.09%£28,000£581
West Midlands26.27%£28,536£620
Yorkshire23.24%£27,835£535
North West25.49%£28,137£593
North East23.13%£27,187£520
Scotland24.67%£30,000£612
Wales25.68%£27,500£584
N. Ireland23.45%£27,434£53

Source: The DPS