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According to the latest data from HomeLet’s Rental Index, UK rents for new tenancies have begun to rise at a rate not seen in the market for over two years. The annualised picture shows rental values having increased at a higher rate than was seen in 2018 – rising by 3.3% in the last 12 months.
The HomeLet Rental Index – the most comprehensive and up-to-date data on rental values in the UK – is showing a move away from the normal fluctuations in the private rental market, with rents for new tenancies now rising at a rate above inflation – one that has not been recorded since October 2016.
The headlines from March 2019’s HomeLet Rental Index are:
Commenting on the data, chief executive of HomeLet, Martin Totty, said: “With the Tenant Fees Act due to take effect in England from 1 June, the acceleration we’re seeing in agreed rental values will come as no surprise to anyone.
“Whilst the aim of the Tenant Fees Act is to reduce the costs that tenants can face, landlords still need to cover the costs that are incurred when setting up a tenancy. With landlords already feeling the impact of taxation changes, the expectation is that costs will be passed back to tenants through higher rents, particularly for new tenancies.
“Landlords’ ability to increase rents will largely be determined by local market dynamics of supply and demand for property. Regional ‘hotspots’, where rents are increasing faster than the UK average over the first three months of 2019 when compared to last year include Wales, Yorkshire and Humberside, the West Midlands, the North East and West, the South East and West, as well as Greater London.”
Commenting on the outlook for 2019, Martin added: “Recently released annual results from a number of major quoted property agents point to a resilient private rented sector in contrast to a subdued sales market. With a still unclear outcome of the Brexit political impasse and the increasing prospect of a further extended delay in the UK exiting the European Union, the contrasting fortunes of the two main segments of the housing market seem likely to continue for some time.
“If demand for rental property remains strong, coupled with the lower frictional costs of moving between rental properties for tenants from 1 June, landlords may yet be able to recover the additional cost burden they will face by edging up rents. This will likely require the current high levels of employment and real wage growth being sustained. But, it could be the case both tenants and landlords get what they want – tenants are relieved of the one-time up-front burden of feed at the commencement of a new tenancy and instead landlords meet these costs and recover them over time via gradual increases to monthly rents.”
As the UK’s largest tenant referencing firm, HomeLet reference over 500,000 tenants every year. The HomeLet Rental Index provides the most comprehensive and up-to-date data on rental values in the UK.
The trends reported within the HomeLet Rental Index are brand new tenancies, which were arranged in the most recent period, providing an in-depth insight into the lettings market.
Head to https://homelet.co.uk/homelet-rental-index/ for more information.SEE ALSO - ARLA: The health of the private rented sectorUP NEXT - Zoopla reveal top 10 BTL hotspots for 2019DON'T MISS - Rents rise as Landlords exit the sectorNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
At the end of the day cost have to be passed on to a customer so rents have to rise
How customers on benefits pay more, I don’t know?
LHA has been frozen for years , so what happens next?
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I think what happens next is what we are seeing - rocketing homelessness. Isn’t it funny though that you never see these tax attacks blamed in any articles about homelessness? It’s almost as if every single media outlet had been told not to report that fact...
Correct - we will be seen as greedy self centred landlords again !
Probably a sequential downshifting and/or sharing - eg an LHA tenant entitled to say a 3 bed property takes a 1 or 2 bed instead so that the LHA fully covers the rent - rather than as in SE leaving up to 30% shortfall.
The LHA cap has effectively been economically cleansing especially London for many yrs already - with many thousands of low income households forced to relocate to cheaper areas - sometimes hundreds of miles away.
Just done a new tenancy
I increased it by 3.5% .
They didn`t blink
Jonathan Clarke. http://www.buytoletmk.com
The average UK rent seems to be roughly in line with inflation as I would expect, I guess that doesn't make such an interesting story though!
It's interesting the SW has the greatest gains, probably as it is the area most hit by S.24.
DPS say rents have been falling, who do we believe?
The Deposit Protection Service, one of the government-approved bodies that has taken care of tenants’ deposits since 2012 and is one of the few official sources of data on rents, said that rents have fallen to their lowest level in three years.
Impact of tenant fees ban, S24 (Which is plain ridiculous - I am not aware of any other business that is taxed on turnover), HMO Licensing, etc.....so hardly surprising that rents are increasing.
Hardly rocket science - surprised that the Govt / people are surprised.
Thank you for sharing Vanessa, interesting read.
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£19bn owed in household debt, rent arrears to housing associations £427m, private sector £609M 1 in 3 council tenants in arrears. Will be interesting to see if the trend in rents continue. The Homelet Rental Index does not tell you how many of their tenants are in arrears and by how much. Thats the real trend in rents.