New data from the latest HomeLet Rental Index shows the UK’s average rental amount now stands at £806 per month after lowering by 1.1% during November. This is the lowest amount recorded since May 2013, when UK tenants were paying an average of £787 per month to live in a rented home.
Average UK rental amounts peaked during September 2013, when the average was £854 per month – the highest amount recorded. Since September this amount has seen two consecutive monthly decreases of 4.4% during October and 1.1% during November.
Greater London has also seen a second consecutive monthly decrease in average rents. After reducing by 1.6%, it now costs an average of £1,263 per month to rent a home in the capital – again the lowest amount since May 2013.
The North West was home to the largest monthly and annual increases of 4.1% and 6.6% respectively. It now costs an average of £658 per month to rent a home in this region – the highest average amount recorded since August 2013.
Gary Abraham, HomeLet’s Sales and Marketing Director, said:
“It appears the surge in people buying homes this year following the introduction of the Help to Buy scheme has reduced the demand for rental properties and led to the stabilisation of rents across the UK.
I believe this is positive for the private rented sector. Rental prices were rising at a very high rate due to high demand and lack of supply – and consequently making costs increasingly unaffordable. However, with Help to Buy now in place, this demand has relaxed, rents have eased and tenants can hopefully look forward to more stable living costs.
The private rented sector offers many different lifestyle choices to a wide range of people. However, record rents - as reported in the HomeLet Rental Index - during 2013 reduced this flexibility somewhat by making monthly rents unaffordable and pricing many potential tenants out of the market.
The ongoing stability of rents is dependant on the ongoing recovery of the housing market though, and focus must be maintained on increasing housing supply and providing financial support to those wanting to buy their own home.
The demographic of tenants is changing – we can see from this month’s data the average age of those renting a home across the UK has increased by a year to 34.4 since November 2012. Although rents may be stabilising, momentum must be maintained on making sure tenants are provided with decent homes, secure tenancies and affordable rents. The market can then return to its position of being an accessible, affordable and flexible housing option for the UK’s population.
The 2013 Autumn Statement did not outline specific plans for the private rented sector. However, proposals such as the Tenants’ Charter should still come to fruition so standards, confidence and investment is maintained and improved across the industry.”
