According to both the LSL letting agent indices and Belvoir Rental Index, which both measure existing and new rents, have risen slightly over the last three months. The Homelet index, which is an insurance index, is showing much larger increases from June onwards which are above inflation. This is due to the fact that the index only covers new tenancies and they are seeing a move to higher value rental properties, meaning not ‘all’ rents are rising.
The main indices we track monthly are Homelet, LSL and Belvoir. Belvoir and Homelet are national (ie include Northern Ireland, Wales and Scotland), while LSL’s Buy to Let index covers England and Wales.
LSL (Your Move and Reeds Rains) suggest that rents have ‘edged to a new all-time record’ but this is only as far as their index goes back to – which is 2010. It doesn’t cover the highs seen in rents in 2008, which according to the Belvoir Index, shows rents are still only on a par with those seen six years ago.
Both LSL and Belvoir also show that residential rents across England and Wales are just £10 higher than September 2013, and a slight increase based on August 14. Both of these indices do seem to be tracking similar trends together, showing some consistency in rental indices reporting.
David Newnes, director of estate agents Reeds Rains and Your Move, comments: “As the wider cost of living grows ever more slowly, so too has the cost of renting a home. That said, autumn is always a busy period for the lettings industry, and this has been no exception. Looking ahead, it is likely that rents in most parts of the UK will have now reached their seasonal peak – so as the market cools along with the autumn weather there may be opportunities for some tenants to pick up a favourable deal.”
For new tenancies, Homelet suggest the average rent is 8.2% higher than in September 2013, but mostly driven by London, elsewhere, rents are up 4.6%.
What’s happening to Regional Rental Trends?
Much the same as national property prices versus regional ones, rental trends vary for each area, even to postcode level, but not as much as property prices. For example, you might have 10 different prices for a two bed flats vs four for rent. In the regional indices chart, we include average monthly rents from LSL, Homelet and Belvoir for Sept 14 vs Sept 13, compared to the Move with Us and Countrywide average monthly rent for Q3 14 vs Q3 14.
It’s unlikely that any indices can be directly compared, but what we can do is check whether they are all giving the same trending information – ie going up or down, so we can get a feel for what’s actually happening in the market from a variety of sources.
The breakdown for Scotland and Wales regions show:-
For Wales, the Homelet, Belvoir and LSL indices all suggest a slight year on year fall of -1.8% and -1% respectively, with Countrywide showing an insignificant rise of 0.8% and Move with Us and larger rise of 5.3%, year on year. Overall, it looks like rents in Wales are pretty static to falling.
In Scotland, the indices are mostly showing higher than average rises year on year. Countrywide and Move with Us indices shows rental increases of 5.7% and 10.2% respectively.
According to the Scottish Buy to Let Index from LSL, “Average residential rents across Scotland are still 2.0% (£11) higher than a year ago, but this represents a slowdown of growth on an annual basis. Annual rent rises have eased off from 2.7% last month, and fallen back from a 3.1% annual change in the year to September 2013.” For new tenancies, Homelet indicates an insignificant rental drop of -0.2%, suggesting rent rises may have peaked.
Rental changes in English regions
The breakdown for the English regions shows:-
In the North East, rental averages tend to be erratic due to property rents ranging from around £300 to in excess of £2,000 a month. Having said that, we are seeing some consistency this month with LSL, HYPERLINK "http://homelet.co.uk/homelet-rental-index/" Homelet and Move with Us indices all registered small year on year falls of -2.3% and -0.6% respectively, with Countrywide showing a small rise of 2%. Looking at Belvoir’s individual offices, rents appear to be stable to slightly rising.
The data from Belvoir and Move with Us for the North West, show small year on year falls of -2.5% and
-1.3% and LSL and Countrywide also showing rises of 2%. New tenancies show Homelet indicating a small rise of 1.7%.
In the Yorkshire & The Humber region, the figures from Belvoir and LSL show a year on year fall of -2.6% and -0.4%, with Move with Us, Homelet and Countrywide registering small increases of 0.5% through to 2% respectively.
With the exception of Move with Us, the figures would suggest that rents in the East Midlands, year on year, have changed very little, with rental movements of -1.2% and -1.1% via Homelet and Belvoir, and no year on year rental changes from Countrywide and LSL. However, the Move with Us data suggests rents have increased by 4.2% over the last year.
In the West Midlands, the rental indices show quite big rental changes from falls of -2.4% and -0.2% via LSL and Belvoir , through to no change from Countrywide, and increases of 3.7% and 8.3% from Move with Us and Homelet. This suggests quite big differences in the reports, likely to be down to a mix of areas and property types.
For the South West region, Belvoir indicate a small year on year fall in rents of -2%, Countrywide a slight rise of 1.5%, LSL small rises of 2.2%, Move with Us a rise of 4.4%, and Homelet showing a larger increase of 8.1% for new tenancies.
The rental indices for East Anglia show variations in year on year rental movements, ranging from small increases of 2.3% and 3.1% from Belvoir and LSL, through to larger increases of 5.9%, 7.3% and 11.3% via Move with Us, Countrywide and Homelet.
Monthly average rents in the South East region vary from small rises of 1.9% and 3.2%, year on year, from LSL and Belvoir, through to rises of 4.6%, 7.2% and 10.6% via Countrywide, Homelet and Move with Us respectively.
In Greater London, the rental indices show significant variations in year on year rental movements, ranging from a fall of -3.8% recorded by Belvoir, through to a small increase of 2.2%, and much larger increases of 9.6%, 9.8% and 11%, via LSL, Homelet, Countrywide and Move with Us.
What’s happening with Room Rents?
We work closely with SpareRoom who run their own Index to help buy to let landlords and tenants understand the trends in renting a room and they support our Rent a Room Checklist.
National room rent trends from SpareRoom show “the average UK rent last month was £544, back to levels we saw in July this year (£546)”
Regional Room Rent Trends
The average UK rent last month was £544, back to levels seen in July this year (£546). Areas including Milton Keynes, Bournemouth, Croydon and Blackburn have seen a steady annual rental growth of 3%. On the flipside, Salford, Newport, Londonderry and Kirkcaldy have seen a 3% reduction in rents year on year. Rent levels remain constant in Poole, Exeter, Gateshead and Northampton.
Interestingly, throughout London, room rents appear to have peaked so far this year and we are now seeing falls during September, from between -6.6% in South East London through to -3.9% in East Central London.
