An increase in UK rental prices comes as demand continues to outgrow supply. With landlords cautious about making new investments in the rental sector amid changing tax and legislation, the properties that are available have increased in value.
The latest report from HomeLet shows that in December 2019, the average rent in the UK had reached £953 per calendar month (pcm). That’s up 3.5% from 2018 Excluding London, this drops to only £793pcm, which is still up considerably, sitting at 3.9% from 2018.
All regions monitored by HomeLet, including the North West, have displayed an increase in rental values within this time period. The North West itself has seen an increase of 8.3%, going from an average rent of £698pcm to £756pcm.
Martin Totty, chief executive of HomeLet, said: “It’s likely that there are several things contributing to the robust performance of rental prices, the first being the Tenant Fees Act
introduction in June 2019. This moved the burden of some fees from tenants to landlords...”
However, the rising demand for rental properties is not slowing down with the Office for National Statistics reporting the number of households in this sector reaching 4.5 million in 2017. With fewer people looking to make the move from rentals to homeownership, the demand for rental stock will remain high.
Totty continues, “Over the past two years, there has been a surprisingly resilient economy with record levels of employment combined with low inflation and real wage growth, meaning that the higher rents posed by landlords have still been affordable for many private tenants.”
Going into 2020, Totty predicts a continued period of price growth providing there is a balance between supply and demand.