Rents Hit Another Record High
According to official figures, rents have risen at a much slower rate than inflation over the past 12 months.
However, the annual hike of 3.8 per cent across the UK to October 31 2022, was the highest recorded for more than six years.
The region with the highest rent increase was the East Midlands, where tenants are paying an extra 4.8 per cent, while the lowest rise was three per cent in London, says data from the Office for National Statistics.
The ONS rent study explains that letting agents report tenant demand for rented homes is growing, and this appetite for private rentals is leading to higher rents.
Although tenants in the East Midlands saw rents rise the most, the North West (up 4.5 per cent) and the South West (up 4.3 per cent) were not far behind.
What’s happening to rents where you are
This is the latest rent data from the ONS:
London tenants still pay most
Average rents have now hit £1,171 a month - up 10 per cent in a year, according to tenant referencing firm Homelet.
Rents are highest in London, where tenants pay an average of £1,989 monthly.
HomeLet CEO Andy Halstead said: “A lot has happened in the past few weeks with another new prime minister appointed, but away from the chaotic scenes on Downing Street, things are much more predictable in the rental market, with prices continuing to rise monthly.
“The average rental price in Greater London is creeping towards the £2,000 a month mark, and the cheapest rental region of the UK, the North-East, also saw a big month-on-month jump in the average rental price. That said, we have seen a slight slowing down in the rate of price rise in most other regions of the country.
“Our message has remained consistent, that the continued trend of landlords leaving the market is likely to see prices continue to rise, with a lack of properties to meet demand bound to result in a more competitive race to secure a let for the average tenant.”
How have rents changed?
Yorkshire & Humberside
East of England
UK excluding Greater London
London property agents Hamptons report rents have passed the £1,200 mark for the first time.
The firm plots rents reached £1,204 in October - up £80 a month (7.1 per cent) over the past 12 months, costing tenants an extra £960 yearly.
The firm suggests private tenants now spend an average of 44 per cent of their household incomes on rent.
Aneisha Beveridge, head of research at Hamptons, said: “The good news for tenants is that rental growth has slowed from its double-digit summer peak and looks likely to settle around the 5-6% mark by the end of the year. This will be welcome news for many households seeing other costs spiral as inflation peaks.”
Guild of Landlords Rent Digest – FAQ
For landlords confused by the stats and what they mean, here are answers to the most-asked questions about rents.
Why do the rent indices show different results?
You should always check the data carefully. Other indices cover different periods, and the samples vary between reports.
The ONS has the most extensive sample, so the most reliable figures should return, but the time to collect and analyse the statistics often means the ONS data lags behind the rest of the sector.
ARLA derives insights from letting agents and provides what's known in the trade as a sentiment survey rather than factual data.
Homelet statistics come from customer data, which may only partially reflect the market.
Should landlords raise rents in line with the stats?
That's a business decision for landlords. The rent statistics indicate how the market moves but do not reflect demand from tenants and property standards in local neighbourhoods.
Remember that the data is historical, showing what's happened rather than what will happen.
Which rent index is the best?
That's up to individual landlords. For instance, one index with a solid customer base in the same area as a landlord's portfolio may align more closely with market rents for that neighbourhood.
Average data is only good if you have an average home; median rents cover everything from a room in a shared house to a four-bedroom home.
Extra research with local letting agents is likely to indicate better where a landlord should pitch a competitive rent and stop them from underselling.
How has coronavirus disrupted the statistics?
Although several letting agents and property organisations publish regular rent statistics, many have been affected by the coronavirus lockdown that has their reports suspended or delayed.
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Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.