Rents in the UK are not jumping up at the level some had expected with latest data showing they increased by 0.8% in February compared to one year ago.
This marks a lower rate of rental appreciation, down from 4.7% last year in June.
The figures published by HomeLet Index show that rent on average is now £895 per calendar month, which is 0.8% higher than twelve months ago. In London, average rental costs sit at £1,520, an increase of 0.4% from one year ago.
In four out of twelve regions, average rental value has either remained the same or fallen. These areas are Scotland with an drop annually and monthly, Wales where prices fell month-on-month but increased over the last year, the South West where prices remained unchanged both for the annual and monthly comparison and the North East where they remain the same over the year and down month-on-month.
Yorkshire and Humber has been the country’s strongest market. Average rents increased by 3% annually, to £623, and by 1.3% month-on-month. Furthermore, the East Midlands have been very solid with a rental price increase of 1.2% year-on-year and 0.3% monthly.
There has been a lot of discussion whether landlords will increase their prices to cover some of the additional charges they are facing, i.e. mortgage tax relief changes and the ban of letting agent fees for tenants. The HomeLet report, however, suggests that this won’t be happening anytime soon.
HomeLet research states that half of the 3,726 participating landlords think they have to raise rents to cover their additional costs, although 29% of them plan to postpone this increase until 2018. This suggests an awareness on the landlord’s side for the need for steady rents.
UK regional rental prices: North West leading the way for yield and demand
The survey also underlined that most landlords are determined to maintain their strong relationship with their tenants.
HomeLet’s chief executive office, Martin Totty, says:
“Our research again demonstrates that the vast majority of landlords have positive working relationships with their tenants. In recent months, we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay. With 21% of landlords blaming an increase in their tax liability for raising rents, it remains to be seen if this can be sustained.”
