2020 Ends With Rents On The Up, UK Average Monthly Cost Now At £979
UK Average rents show 2.7% YOY increase, but London rents continue to fall, down by 4.5% YOY
Vast majority of rental regions show year-on-year rental cost increase.
The South West shows the largest increase, up 10% year-on-year.
The trends reported within the HomeLet Rental Index are from data on actual achieved rental values for just-agreed tenancies arranged in the most recent period – providing an in-depth insight into the lettings market and what’s happening right now across the UK.
The HomeLet Rental Index now includes data from both HomeLet and Let Alliance.
The Rental Index is now based on around 1 million references processed each year on behalf of UK Letting Agents, the Rental Index represents the largest, most insightful and up-to-date view on the UK’s private rented sector.
Commenting on the latest data, Andy Halstead, Group Chief Executive Officer said:
Andy Halstead, Group Chief Executive
“At a national level the latest data shows a continuation of the trends we’ve seen emerging since the national lockdown ended, with rents for new tenancies increasing across the UK, with the exception of London.”
“In the regions surrounding London, the annualised variations in rental values for new tenancies looks significant, especially in the South West (10%), East of England (7.7%) and South East (6.1%). In reality this is a theme that we’ve seen grow gradually month on month, since July 2020.
“In the South West average rents are now £83 per month higher than the same time last year. The upward pressure on the regions around the capital, particularly commuter towns, is coming from a broad range of tenants looking for more space, both inside and outside the property. The trends we’ve seen in the past 12 months highlight the responsiveness of the private rented sector, and the crucial role it plays in supporting the changing needs of a significant proportion of households in the UK.”
Commenting on the outlook for 2021, Andy continues: “Whilst overarching optimism remains strong for 2021, with vaccines being rolled out for Covid-19, we can still expect a year that will be disrupted by the impact of the virus. With the new national lockdown and the prospect of additional restrictions to help curb the impact of the virus and new variants, we can expect the demand for certain property types and locations to grow, pushing rents up further.
“With the uncertainty in a range of job markets and employment in general, we’ve seen an exceptional demand for our products that protect rental incomes for landlords. Contrary to perception, the vast majority of private landlords couldn’t survive financially if their tenants failed to pay the rent, especially for an extended period. Letting agents have been key to providing landlords with access to products and services which help to mitigate the risks of rental arrears, which will remain high throughout 2021.”
The average rent in the UK is now £979, showing a 2.7% increase on December 2019 (£953).
When London is excluded, the average rent in the UK is now £838, showing an increase of 5.7% on last year.
Nine of the twelve regions monitored by HomeLet showed a YOY increase in rental values between December 2019 and December 2020, with the South West seeing the largest increase for the fourth month in a row (10%).
However, rents in London continue to fall YOY, showing a 4.5% drop between December 2019 and December 2020 - the seventh decrease in annual variance in subsequent months.
Northern Ireland also shows a continued yearly decrease, with a 2.3% fall between December 2019 and December 2020 – the third decrease in annual variance in subsequent months.
14 of the 21 London borough groupings monitored by HomeLet showed a YOY decrease in rental values between December 2019 and December 2020.
Hammersmith, Fulham, Kensington and Chelsea shows the largest decrease in the London boroughs, with a 10.2% fall between December 2019 and December 2020, while Brent saw a 7.7%% increase YOY.
In December 2020, average rental value in London (£1,576) was 86% higher than the rest of the UK, excluding London (£838).
As featured in
The HomeLet Rental Index incorporates a methodology designed in conjunction with a professor at the London School of Economics. The methodology factors in important elements, such as property type and geography, to create mix adjusted averages. This makes Britain’s most comprehensive rental market benchmark even more insightful. The methodology has been applied retrospectively to our historical rental market data to ensure that the Rental Index can continue to be used to provide analysis of trends in the private rental sector.
The index and average prices are produced using HomeLet’s mix adjusted rental index methodology. This helps to track the representative rental values over time, which factor in changes in the mix of property types and locations of rented properties.
Data is gathered from our tenant referencing service, and our rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs. The data used in the HomeLet Rental Index is aggregated to regional, county and city level only. This ensures that all property or individual records remain strictly anonymous.
The HomeLet Rental Index is prepared from information that we consider is collated with careful attention, but we do not make any statement as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue this report. The HomeLet Rental Index may not be used for commercial purposes; we shall not be liable for any decisions made or action taken in reliance upon the published data.
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