Rent values up and down the country are rising at a pace never seen before, to the point where the average UK monthly rent bill is now £984. The only exception is London where rent just keeps getting cheaper.
An average UK rent value of £984/month indicates a 3% rise in the last 12 months. But if London is removed from this average, we get an average monthly rent of £840 which marks a huge 6.2% rise in the past year.
It’s interesting to remove London from the rest of the nation when it comes to studying rent values because while prices soar everywhere else in the UK, London rents continue to fall year-on-year, with a 4.7% decline between February 2020 and February 2021.
Rent in London is falling because of a number of reasons. Covid-19 is playing a major role, tempting lots of people to escape the city for greener pastures, or to purchase a home in a region where they get far more bang for the buck.
The biggest rise in rent values has been seen in The East Midlands, where your average rental home will cost you 8.1% more than it did last year.
Rising rent is not always a positive indicator for the housing market. While it can often be a result of increased demand (this is certainly true to an extent today), it can also be a result of landlords charging higher rent in order to cover additional costs the landlords themselves are having to pay.
Discussing the rising rent values of the UK, Chief Executive of HomeLet, Andy Halstead, says:
“Those in the lettings sector warned of the Tenants Fees Act’s unintended consequences, along with the impact of the continued assault on landlords through policies that disincentives property investment.
“We’ve seen the volume of UK landlords dip, whilst supply from tenants has continued to grow. Landlords have to charge more to cover their essential costs, including professional letting agents’ valued services.
“Ultimately this pushes increased rents back on to tenants, the same group who supposedly should have benefited from legislation like the Tenants Fees Act.”
The Near Future
When rent values are going up, it usually means that demand is outweighing supply: landlords know that lots of people want to move in so they’re able to charge a higher asking price.
Looking into the near future, there are a number of reasons why demand might fall quite dramatically, thus bringing the price of renting down.
Furlough is a very good example. A lot of people are currently being protected against loss of income during lockdown and pandemic. But when furlough comes to an end, perhaps towards the end of 2021, it could leave a lot of people either out of pocket or out of work. In such a situation, fewer people will be looking to rent new homes and prices will therefore come down.
So, while rent values are currently very high (except in London), you might want to hold off moving into a new rented home. Instead, wait until the end of summer and see if the prices start to come down slightly.
If you have any questions about renting, our in-house property expert, Russell Quirk, is happy to help. Drop us a message in the comments section below and he’ll get back to you pronto.