Posts with tag: Rentd

London rental costs set to increase by £1,412 per year by 2025

Published On: July 14, 2022 at 11:18 am

SpareRoom study shows most affordable places to rent in the UK

Using the last decade of rental market data for each London borough, rental platform Rentd has forecast what the average cost of renting could look like in London by 2025.

The largest London monthly rent increases are forecast to be seen in the boroughs of Kingston, Newham, and Barking and Dagenham, Rentd reports.

The research shows that currently, the average London rent is £1,629 per month, having increased by 24% in the last decade. This is a 2.4% average annual rate of growth.

Based on this annual rate of growth, Rentd’s forecast estimates that this could hit £1,747 per month by 2025, a further 7% increase. This would mean the average London tenant would be paying £118 more per month, or £1,412 more per year.

Rentd’s research estimates that Kingston upon Thames could be due to see the largest increase in the cost of renting. Currently the average monthly rent in the borough stands at £1,519 per month having increased by 59% in the last year alone. This is forecasted to climb by 17% to a monthly average of £1,783 by 2025, adding £3,171 to the annual cost of renting.

Newham is also forecast to see a 17% increase in rental values, meaning tenants would be paying an additional £3,068 per year to rent within the borough.

Tenants in Barking and Dagenham (+14%), Waltham Forest, Richmond and Greenwich (+13%) could also face some of the largest percentage increases in the average monthly cost of renting, while Richmond (+£2,940), Wandsworth (+£2,507) and Hackney (+£2,364) are also due to see some of the largest monetary increases in the annual cost of renting.

At £2,359 per month, Westminster is currently the second least affordable London borough when it comes to the cost of renting, with just Kensington and Chelsea home to a higher average monthly rent (£2,716).

However, Rentd’s forecast suggests that Westminster rents could climb by just 1% by 2025, an increase of just £27 per month or £329 per year.

Ahmed Gamal, Founder and CEO of Rentd, comments: “The cost of renting within London has increased considerably over the last decade, driven by a sustained level of tenant demand, not just because the cost of buying is so high, but also due to a move towards long-term renting as a lifestyle choice, not just a necessity.

“Despite this, the government has done its best to deter investment into the London rental market, with a string of legislative changes designed to dent the returns available to landlords. This has further reduced the level of available stock within the capital and contributed to the high increase in the cost of renting that London’s tenants face today.

“While it’s great to see the London rental market demonstrate a high level of resilience following what was a fairly complicated pandemic period, more must be done to entice investment into the sector to prevent the future cost of renting spiralling out of reach for the average tenant.”

Short-term rental market research pinpoints London hotspots

Published On: May 17, 2022 at 12:55 pm

Author: Em Morley

Categories: Landlord News,Lettings News,Property News

Tags: London,rental market,Rentd

Rental data reveals London has become unaffordable for graduates

Research into London short-term lets has found that Westminster provides the greatest level of rental stock choice.

London rental platform Rentd analysed current rental availability for short-term rentals across the London market to reveal which boroughs were home to the highest level of short-term rental stock.

The market analysis shows that there are some 66,641 short-term rentals currently listed to let across the London rental market.

Westminster is the capital’s short-term rental market hotspot, with 11% of all available short-term rental properties found within the borough.

Tower Hamlets ranks next, accounting for 8.3% of London’s short-term rental availability, followed by Hackney (7.7%), Camden (6.8%) and Kensington and Chelsea (6.8%).

In contrast, Havering, Sutton and Bexley are home to the lowest levels of short-term rental availability, with each borough accounting for just 0.4% of total short-term stock each.

Ahmed Gamal, Founder and CEO of Rentd, comments: “Short-term rentals form an integral part of the rental market and for many, they are the vital stepping stone between moving to a new town or city and finding that perfect long term rental property.

“For others, they provide a preferable option to hotel living when working away from home for a prolonged period and providing this flexibility is as important as the need for long term rentals within the sector, perhaps more so in major cities such as London.”

London rental yields are recovering from the pandemic

Published On: May 9, 2022 at 8:36 am

Author: Em Morley

Categories: Landlord News,Lettings News

Tags: London,rental yields,Rentd

London rental yields are on the rise after a temporary pandemic slump, according to research by rental platform Rentd.

It says southern areas of the capital are providing particularly strong opportunities for buy-to-let landlords.

London’s property market was hit by a dip in demand during the pandemic, as people prioritised green, open space over urban living. This, alongside a reduced need to commute to the office, created a drop in demand for rental homes in England’s biggest city.

This fall in demand caused rental values to dip and led to a fall in yields. However, with the London rental market improving, Rentd has seen yields increase again.

In the past year alone, average yields have climbed by 0.3%, from 3.3% to 3.6%. However, there are a good number of areas where yields have climbed more dramatically.

In the SE17 outcode area around Walworth, yields have increased by 1.4%, from 4% to 5.4%; and up in Hampstead Heath’s NW3 area, they’re up 1.1% from 2.9% to 4%.

In the Forest Gate area of E7, yields have increased by 1%, from 3.7%-4.7%, and the same increase applies to both SE16 and SE8.

In E9, SE4, SE5, CR4, and EN4 respectively, yields have increased by 0.9% on the year.

Ahmed Gamal, Founder and CEO of Rentd, comments: “The capital’s rental market is showing a solid return to form after a slightly concerning dip in the early days of the pandemic. It was probably a little naive to think that renters would reject London in the long-term. It is, after all, one the greatest cities on earth and the opportunities it presents are unmatched in the UK.

“It’s interesting to see the south of the city enjoying much of the strongest yield growth, suggesting that, while people are still happy to live in a major city, they also want to maintain easy access to the green and coastal locations easily accessible from the south.”

Rental demand has returned to London, says lettings portal Rentd

Published On: March 31, 2022 at 8:08 am

Author: Em Morley

Categories: Lettings News

Tags: London,Rentd

73% of surveyed estate agents back mandatory licensing

The London rental market has seen a quarterly increase in rental demand during the first quarter of 2022, according to research from lettings portal Rentd.

The research looked at the hottest spots of the London rental market based on the proportion of total rental stock currently available on the market that has already been snapped up by tenants, as well as how this demand has changed over time.

Returning rental demand in London

The figures show that London rental demand was at 42%, climbing 4% on the previous quarter.

Waltham Forest has seen the largest increase in tenant demand, up +16% during the first three months of the year, with Redbridge (+12%), Barking and Dagenham (+11%), Havering (+11%) and Hounslow (+11%) also seeing some of the strongest uplifts.

Only eight boroughs have seen a decline in rental demand since the end of last year, with the majority found in the prime London market. Merton (-12%) has seen the largest quarterly decline, with Tower Hamlets (-4%), Islington (-3%), Southwark (-2%) Kensington and Chelsea (-2%), Kingston (-2%), Westminster (-1%) and Camden (-1%) also seeing a decline.

London rental market hotspots

Bexley, Waltham Forest and Bromley rank top for current rental demand, where 60% of all rental properties have already been taken off the market during the first quarter of this year.

Havering and Sutton have also proved popular amongst the capital’s returning tenants, with demand at 56% and 55% respectively.

Kensington and Chelsea and Westminster are currently the least in demand areas of the London rental market, with demand at just 15%.

Ahmed Gamal, founder and CEO of Rentd, comments: “The London rental market has been particularly hard hit during the pandemic and with a lack of both foreign and professional tenant demand, landlords have had to slash their rental price expectations simply to avoid long void periods with no income at all.

“This has led to surges in demand over the last year as tenants have looked to take advantage of these much lower rental values but the London rental landscape has been unsettled, to say the least.

“However, this year has brought a rejuvenated level of certainty to the market, spurred by a return to the workplace and an uplift in rental demand for London properties. As a result, we’re seeing rental values return, and exceed, pre-pandemic levels in many parts of the market and this will be very welcome news for the capital’s landlords.”

Tenants earnings are below rental affordability threshold in five of England’s regions

Published On: March 29, 2022 at 8:20 am

Author: Em Morley

Categories: Tenant News

Tags: Rentd

Landlord portfolios shrink due to government policymaking

Research by leading rental portal Rentd has found that the earnings of the average tenant sit below the rental affordability threshold in five of England’s regions.

The research looked at the current average income of a tenant and how it compared to the average level of rental affordability based on the benchmark of two and half times the average rent.

The research shows that the average annual income for a rental tenant in England is currently £28,116. This is 12% below the wider average.

Rentd says as a rule of thumb tenants should work to a rental affordability ratio of earning 2.5 times their rent in order to live comfortably. However, this is also a gauge that many letting agents will use when deciding if you are eligible to rent a property.

It says the average rent bill in England is £968 per month, or £11,616 per year. This means a tenant needs to earn £29,041 per year for their home to be truly affordable. This is, however, £925 more than a tenant’s average annual income.

As many as five regions are home to tenant earnings that come in some way below the rental affordability ratio of 2.5 times income. In London, the average tenant earns £39,585 a year but with annual rent costing an average of £21,084, this means they’re coming in -£13,125 below the affordability threshold. In the South East, they’re falling -£4,531 short; in the South West, it’s -£4,046; in the North West it’s -£2,985; and in the East, affordability is missed by -£1,471.

However, the research shows four regions offer a great chance of rental affordability.

In the North East, where the average annual rent cost is £6,996, a tenant would ideally earn £17,490 a year in order to live comfortably. In fact, the average tenant income for the regions is £25,878, £8,388 above the affordability threshold. This makes the North East the most affordable region in England.

In the East Midlands, the average tenant has an income £4,878 above the threshold; in Yorkshire & Humber, average income is £3,978 above the threshold; and in the West Midlands, income is £1,740 above the threshold.

Founder and CEO of Rentd, Ahmed Gamal, comments: “Rental affordability has been a burning topic for quite some time and unfortunately, it still remains a serious issue in today’s rental market. More and more of us are remaining reliant on the rental market until far later in life and this means more tenants fighting it out for a limited supply of rental homes.

“Rather than tackle this issue head on and look to increase rental stock supply, the government has actually looked to reduce the number of landlords operating within the sector via a number of changes such as tax relief and an increase in Stamp Duty on buy-to-let homes.

“They’ve done so in order to increase supply to an overheated housing market to gloss over the fact that they simply haven’t built enough houses, leaving the nation’s tenants out in the cold as a result.

“At the same time, wage growth simply hasn’t kept pace with the wider cost of renting and living and this has only helped increase the issue of affordability within the rental sector.”