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First Rental Index Reveals Continuing Rent Rises
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Rent prices for three-bedroom homes have grown faster than for any other property type in the last 12 months, according to a brand new rental index.
The Landbay Rental Index is based, where possible, on rents provided by Zoopla.
It found that the average rent on a three-bed home increased by 4.6% annually to August, compared with a 3.3% rise for all UK rental properties.
Landbay claims that it is the first to track rents at county and London borough level in terms of number of bedrooms. The index shows that rent prices for three-bed properties have increased faster in areas within London’s commuter belt.
First Rental Index Reveals Continuing Rent Rises
The Royal Borough of Windsor and Maidenhead experienced the greatest yearly rise in rents, with the average three-bed home costing £1,936 per month, a 22% increase on August 2014.
The average price on a similar property in Southend-on-Sea rose by 20% in the 12 months to August, to £1,121 a month.
Rents in Swindon grew by 13%, to £813, and every area in the top ten saw rises of over 10%.
Co-founder and CEO of Landbay, John Goodall, comments: “Rents for three-bedroom family homes are racing ahead of the rest of the market at the moment.
“This trend is particularly strong in commuter hotspots outside of London, with 12 of the 20 areas with the fastest growing three-bedroom rents within an easy commute of the capital.
“For investors in the private rental sector, our data makes family homes in the South East look like an attractive proposition. As well as performing well now, rents for three-bedroom homes saw the smallest falls when rents dipped in 2013.
“The challenge for investors looking to benefit is finding suitable properties for professionals at a cost that produces a good yield.”
The index was compiled alongside mortgage asset analytics provider, MIAC. It found that the average UK rent is now £1,282 per month, a 3.3% annual rise, which closely matches wage increases of 2.9%, according to the Office for National Statistics (ONS). However, this is still much higher than inflation.
The seaside town of Southend also witnessed average overall rent prices increase by a large margin, with growth of 12.6% over the year, to £767 a month.
Following Southend is York, where rents rose by 12.1% yearly to £776, and Wrexham has an average monthly rent of £539 after growth of 11.1% over the year.
The greatest declines in rent prices were in Cheshire, where they fell by 6.9%, Aberdeen City, down 5.7%, and Buckinghamshire, at 3.5%.
Goodall explains: “At the national level, rents performed very strongly in 2014 after a dip in 2013.
“This year has seen rents continue to grow, but at a slower rate.
“The macro trends at the national level aren’t uniform when you drill into the local level and look at different types of property, which is why we want to establish a rental index that gives landlords, tenants and others interested in the private rented sector access to a more granular level of insight.”1
According to MIAC, the drop in 2013 was caused by the extortionate prices charged during the London Olympic Games in 2012, which had an effect on rents across the country, but mainly in the capital.
1 http://www.propertyindustryeye.com/new-rental-index-says-average-rents-continuing-to-grow/
