Martin Totty, Chief Executive at HomeLet
“The Index returns this month on the back of a marked pick-up in the number of new tenancies agreed during May, providing a forward-looking view of actual rents being achieved.
This month’s data is both surprising and yet not surprising. Surprising that in many regions of the country, especially away from London and the South East, rents have generally held up well month on month and are universally ahead over the year as a whole. Not so surprising is evidence of a softening in rents in the short term in the higher average rent regions and, for the first time in almost three years, a negative movement in London compared with a year ago and a much bigger drop from the prior month.
We are clearly in unprecedented times and predicting even the next few months seems fraught with risk. And ‘risk’ and attitudes to it, would seem likely to be a dominant theme for all actors in our sector for the foreseeable future. Rents may go up or they may go down and defaults may follow the same pattern. Nobody can be sure other than there is one certainty… and that is there is now more uncertainty. June’s HomeLet Rental Index will provide another data point to evidence if we have a new trend line and the direction of travel is different to the one we’d grown accustomed to over recent times.
We’ll report again on in July.”
Average rents across the UK rose by 2.7% in May 2020 when compared to the same month a year previously; the average monthly rent is now £959
Rents in London decreased by 0.2% in May 2020 than in the same month of 2019; the average rent in the capital now stands at £1,598 a month
When London is excluded, the average UK rental value was £803 in May 2020, this is up 3.5% on last year
HomeLet's May Rental Index reveals that rents rose from last year in 10 out of 12 of the regions covered in the research
In May, average rental values in London (£1,598) were 67% higher than the UK (£959)
When London is excluded the average rent in the UK was £803 in May, average rents in London (£1,598) were 99% higher than the rest of the UK
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.