Monday, September 21, 2015
45% of tenants renewing their tenancies had rent increases in August, the highest since the index began. In the more buoyant London and the South East markets, more than half of tenants renewing faced higher rents, according to analysis from Countrywide plc, the UK’s largest lettings agent.
Rents have been growing throughout 2015, driven by a lack of homes available to rent and high levels of tenant demand. The total number of homes advertised to let was down 8% in August compared to last year, whereas the number of registered applicants was up 4%. With fewer options available for tenants looking to move, those choosing to renew their tenancy are more likely to see their rent increase. However, they are still better off compared to those moving home. The average increase in rent of 2.5% for a renewing tenancy is still less than the annual increase in rent for newly let homes.
Average rents for newly let homes have grown by 3.8% in 2015 to reach £946pcm, the highest level since the index began. Rental growth remains well above CPI inflation, which slipped back to zero this month. The South West and Midlands saw rents rise faster than anywhere else in the country with growth of 7% and 6.3% respectively. Growth in newly let rents was seen in all regions except in Central London where rents decreased 1.4% year-on-year. Greater London, although still growing, has seen its rate of growth in rent halve since the start of the year. The South West has seen the highest rental growth in the UK since the start of the year.
Commenting Johnny Morris, Research Director, Countrywide plc, said:
“Falling numbers of homes available to rent and increasing demand from tenants have been the defining features of rental market so far in 2015. Competition for rented homes has intensified and led to accelerating rent growth. 9 tenants are now registered for every home available to rent, up from 7.5 in August last year.
“With pressure on rents and increased competition for homes on the market, the proportion of renewing tenancies seeing an increase in rent has grown. Faced with the choice of staying put or moving in a market with more competition and increasing rents, more tenants are choosing to accept a smaller increase in rent to extend their existing tenancy.
“Rental price growth in the South of England, outside of London is being fuelled by an increase in the number of Londoners leaving the capital, looking for more affordable markets in the commuter belt. With the number of over 30s and families renting steadily increasing, more renters are now making life stage moves out of the capital, which have in the past, mostly been associated with home owners.”
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