Average rents now exceed £1,000 a month in some parts of the country, and there’s more to be gained from tenancy renewals, it has been revealed.
According to research by estate agents Hamptons International, the average price paid by tenants in Britain for a new let is £957 a month. For the purposes of the research, new rents are defined as homes advertised to let on the open market.
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Where are the highest rents?
The average varies widely between different parts of the country. As you might expect, the research shows rents to be highest in London, where demand for rental properties is higher and supply is lower.
For a new let in Greater London, for example, tenants can expect to pay an average monthly rent of £1,702. Move into Inner London, and that price shoots up to £2,609.
However, it may surprise some landlords to learn that rents actually dropped by 0.8 per cent year-on-year in Greater London.
What about the rest of Britain?
The North has the lowest rents out of all the regions across the country, where average rents only reach £648 a month. Heading north of the border we see marginally higher (£658 a month) rents in Scotland, with Wales sitting at £683, and the Midlands reaching £689.
Albeit from low starting points, rents in Wales and the Midlands have grown sharply during the past year, by 4 per cent and 3.3 per cent respectively. This has helped to push up overall rents outside the capital.
Elsewhere, landlords in the South West can expect to rent their properties for an average of £807 a month, while the average sits at £1,052 in the South East.
Tenancy renewals on the rise
Rents on newly let homes in London may have dropped by 0.8 per cent year-on-year, but rents in general rose across Britain – excluding London – by 2 per cent.
In particular, rents on properties where tenants renewed their rental agreement increased by 3.2 per cent year-on-year in London and 2.8 per cent across the rest of Britain, excluding London.
Why are tenants staying put?
Aneisha Beveridge, an analyst at Hamptons International, said: “Despite low stock levels, rents on newly let properties fell in London for the third consecutive month. Moving is costly for both tenant and landlord. In a period of uncertainty, where tenants’ incomes and landlords’ yields are squeezed, more tenancies are being renewed.
“With affordability stretched and less choice available on the open market, more tenants are choosing to stay put. And with landlord yields under pressure from high property prices and tax changes, fewer landlords want to run the risk of looking for a new tenant and suffering void periods.
“But rents outside London continue to rise. Wales and the Midlands have driven rental growth outside the capital to increase 2 per cent year-on-year, the strongest growth in nine months.”
Relief for landlords
This research from Hamptons International will be welcome news for landlords who’ve been hit with a 3 per cent surcharge in stamp duty from April 2016.
Add to that the staged reduction in the tax relief landlords can claim from April last year and the tightening of mortgage lending rules, which have hit activity in the property rental sector.
Are you finding your tenants are preferring to stay put? Is that enabling you to recoup some of your losses by charging more rent? Let us know in the comments below.