Countrywide Quarterly Lettings Index Q3 2013

Countrywide Residential Lettings

Tuesday, October 8, 2013

New tenants registering for rental accommodation increase by 25%

Yields: Analysis from the UK’s largest lettings agency shows that yields remain strong in Q3 2013 with the average yield 6.1%.  One and two bedroom properties are achieving the best yields at 6.8% and 6.4% respectively.  Rental accommodation in Scotland is achieving the highest average yield at 6.6%, followed by the Midlands (6.5%) and Wales (6.4%).

Average quarterly rents: All sized properties saw an increase in average rents quarter-on-quarter apart from three-bedroom properties which decreased 0.5%. Four-plus bedroom homes saw the greatest increase in average rents up 3.6% in Q3 2013 compared to Q2 2013. Rents are likely to have been underpinned by an influx of families looking to move home before the new school term began in September and a lack of supply of larger properties on the market.

Table A: Variations in rents, yields and arrears data in England, Scotland and Wales for property sizes

Bedrooms

Q3 2013 Average Rent

Q2 2013 Average Rent

Q3 2012 Average Rent

Yield %

Arrears >30 days (% rent roll £)

1

£694

£679

£669

6.8%

6.2%

2

£790

£772

£769

6.4%

6.1%

3

£881

£886

£881

6.1%

7.0%

4+

£1,440

£1,390

£1,511

5.4%

6.9%

Total

£868

£845

£854

6.1%

6.4%

Average quarterly rents by region

Overall, average rents across England, Scotland and Wales increased 2.7% quarter-on-quarter.  Wales saw the greatest increase in average rents up 5.6%, followed by the South West up 5.1% and the Midlands up 4.6%. Despite seeing an increase in average rents in Q3 2013, year-on-year Central London and the South East saw a reduction in rents of 3.3% and 1.5% respectively.

Rent arrears: Year-on-year rent arrears decreased in all regions apart from Scotland where they increased 4.2%.  The greatest fall in rent arrears was in Central London down 2.1%.  There was no change in the level of rent arrears in the East of England.

Table B: Variations in rents, yields and arrears data in England, Scotland and Wales

Region

Q3 2013 Average Rent

Q2 2013 Average Rent

Q3 2012 Average Rent

Yield %

Arrears >30 days (% rent roll £)

Greater London

£1,116

£1,110

£1,094

6.2%

7.6%

Central London

£2,429

£2,398

£2,511

4.8%

7.2%

East of England

£850

£821

£835

6.2%

6.9%

South East

£1,090

£1,058

£1,107

5.9%

4.9%

South West

£776

£739

£763

5.7%

4.6%

Midlands

£669

£640

£649

6.5%

6.3%

North

£641

£619

£616

5.8%

7.2%

Scotland

£636

£623

£605

6.6%

8.9%

Wales

£659

£624

£628

6.4%

6.2%

Total

£868

£845

£854

6.1%

6.4%

Commenting on the Index, Nick Dunning, Group Commercial Director at Countrywide plc, said:

"Rental demand has continued to strengthen with the number of new tenants registering for rental accommodation increasing 25% in Q3 2013 compared to Q3 2012. The recent announcement to introduce Help-to-Buy Phase 2 in October 2013 will undoubtedly facilitate a proportion of tenants to make the transition to home ownership. This is great news for both first time buyers and tenants frustrated by the lack of available accommodation in the current market”

“A lack of new stock across Greater London has seen tenants sign extended tenancies as they are keen to secure their property for longer. The average tenancy length in Greater London has increased 13% year-on-year to 17 months.

“While the start of the academic year in September sees students traditionally make up a large proportion of the lettings market, year-on-year their share has reduced. Older tenants and families are now forming an ever larger proportion of tenants renting in the UK. There are varying reasons why people rent for longer but many choose to do so because they enjoy the flexibility it offers, especially in terms of job mobility. With this in mind, now is an ideal time for landlords to expand their portfolios and provide a more diverse range of affordable rental properties to meet the demand of those renting for longer.

 

Applicant change - Q3 2012 vs. Q3 2013

 -Ends-

 

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