Posts with tag: rent prices

London rental costs set to increase by £1,412 per year by 2025

Published On: July 14, 2022 at 11:18 am

Author:

Categories: Lettings News,Tenant News

Tags: ,,

Using the last decade of rental market data for each London borough, rental platform Rentd has forecast what the average cost of renting could look like in London by 2025.

The largest London monthly rent increases are forecast to be seen in the boroughs of Kingston, Newham, and Barking and Dagenham, Rentd reports.

The research shows that currently, the average London rent is £1,629 per month, having increased by 24% in the last decade. This is a 2.4% average annual rate of growth.

Based on this annual rate of growth, Rentd’s forecast estimates that this could hit £1,747 per month by 2025, a further 7% increase. This would mean the average London tenant would be paying £118 more per month, or £1,412 more per year.

Rentd’s research estimates that Kingston upon Thames could be due to see the largest increase in the cost of renting. Currently the average monthly rent in the borough stands at £1,519 per month having increased by 59% in the last year alone. This is forecasted to climb by 17% to a monthly average of £1,783 by 2025, adding £3,171 to the annual cost of renting.

Newham is also forecast to see a 17% increase in rental values, meaning tenants would be paying an additional £3,068 per year to rent within the borough.

Tenants in Barking and Dagenham (+14%), Waltham Forest, Richmond and Greenwich (+13%) could also face some of the largest percentage increases in the average monthly cost of renting, while Richmond (+£2,940), Wandsworth (+£2,507) and Hackney (+£2,364) are also due to see some of the largest monetary increases in the annual cost of renting.

At £2,359 per month, Westminster is currently the second least affordable London borough when it comes to the cost of renting, with just Kensington and Chelsea home to a higher average monthly rent (£2,716).

However, Rentd’s forecast suggests that Westminster rents could climb by just 1% by 2025, an increase of just £27 per month or £329 per year.

Ahmed Gamal, Founder and CEO of Rentd, comments: “The cost of renting within London has increased considerably over the last decade, driven by a sustained level of tenant demand, not just because the cost of buying is so high, but also due to a move towards long-term renting as a lifestyle choice, not just a necessity.

“Despite this, the government has done its best to deter investment into the London rental market, with a string of legislative changes designed to dent the returns available to landlords. This has further reduced the level of available stock within the capital and contributed to the high increase in the cost of renting that London’s tenants face today.

“While it’s great to see the London rental market demonstrate a high level of resilience following what was a fairly complicated pandemic period, more must be done to entice investment into the sector to prevent the future cost of renting spiralling out of reach for the average tenant.”

Research uncovers UK’s most unaffordable areas to rent a home

Published On: June 15, 2022 at 8:16 am

Author:

Categories: Lettings News,Tenant News

Tags: ,

Almost a third (31%) of postcodes in England and Wales are considered unaffordable, rental market research finds.

Specialist rental platform Ocasa has analysed the current cost of renting across each postcode in England and Wales, as well as the average household income. It found that 69% of areas are classified as affordable, based on the Office for National Statistics (ONS) definition. However, this means that 31% are unaffordable. 

The ONS defines a rental property as affordable as long as the cost of renting doesn’t exceed 30% of the household’s income

Ocasa points out that the average annual rent across England and Wales is £12,763, and the average annual household income is £43,341. Therefore, rent accounts for 29% of the average household income.

Regionally, rent is most affordable in the North East, where it consumes just 20% of the average household income of £35,774.

In Yorkshire & Humber, rent eats up 22% of annual income followed by the East Midlands (23%), North West (24%), West Midlands (25%), and Wales (26%). 

In the East, South East, and South West of England, average rent ranges from £12,000 to £15,000 and equates to 30% of household income in each region. 

The only region where Ocasa has found rent to be unaffordable is London. While the average income is £54,194, rent consumes 40% of this, with an average annual bill of £21,439.

Ocasa then analysed the rental market across England and Wales at postcode level and found that 31% of postcodes sit above the affordability threshold whereby rental income accounts for more than 30% of household income. 

London is home to all ten of the most unaffordable places in the country, with the worst offending outcodes being SW1 (77%), WC2 (74%), and W2 (73%). 

The least affordable area outside of London is the BN2 outcode area of Brighton & Hove, where rent eats up 60% of annual income. 

The WR2 postcode in Worcester is the most affordable pocket of the rental market, where a year’s rent costs just 15% of the average household income of £41,900. This is followed by DN21 in Gainsborough (15%) and TS26 in Hartlepool (15%).

Jack Godby, Head of Sales and Marketing at Ocasa, comments: “It’s reassuring to see that the topline cost of renting remains theoretically affordable for the average household but it’s fair to say that this probably isn’t the reality facing many at the moment, as the cost of living crisis is putting a real squeeze on our finances. 

“The cost of rent alone might not break the bank, but once you add household bills and travel, it equates to quite a considerable sum for the average household and millions of people are currently struggling to cover these costs.”

Report finds increasing rent prices are due to shrinking private rented sector

Published On: June 8, 2022 at 9:57 am

Author:

Categories: Lettings News,Property News

Tags: ,,

Propertymark has found that rent prices are increasing due to landlords selling up and reducing the available rental stock.

The key findings of its report ‘A shrinking private rented sector?’ state that 53% of buy-to-let properties sold in March 2022 left the private rented sector (PRS).

It also states 84% of respondents reported a decrease in new investors in the PRS over the past three years.

An overall 49% reduction in available rental properties per branch was recorded in March 2022, compared to March 2019.

Nathan Emerson, CEO of Propertymark, states within the report: “Our research presents a worrying picture for private renters. The number of properties available to rent has been diminishing with a large portion of landlords choosing to sell their properties. A lack of property is the root cause for rent increases and rising figures on social housing lists.

“We know from our qualitative research that the most common reasons for landlords to choose to sell their properties and no longer provide homes are around risk, finances and viability.

“Landlords and letting agents have been the subject of extreme legislation changes as the UK Government tries to improve the sector. However, without a middle ground, these changes are actually proving detrimental to those they are supposed to protect. Sadly we do not see this improving as the sector braces itself for more changes within the anticipated Renter’s Reform Bill and upcoming energy efficiency targets.”

In response to the report, Dan Wilson Craw, Deputy Director of campaign group Generation Rent, comments: “Rents are rising and would-be tenants face bidding wars or demands for multiple months’ rent up-front.

“That is a result of large numbers of people moving back to cities since summer 2021 as universities and offices reopened, putting a strain on homes coming to market. We’re seeing similar rent inflation in the US and Australia.

“When landlords sell up, their properties don’t disappear. They continue to be lived in, either by tenants of the new owner, or by an owner-occupier whose old home is now available for a private renter to buy. Supply and demand stay the same so rents are unaffected.

“Reforms to the rental market are necessary to give private tenants better quality, longer term homes. The government has said that landlords will be able to evict in order to sell or move in – though we believe these grounds should come with protections against abuse. If some landlords are unhappy with that, they won’t be missed.

“Government plans aside, rents are too expensive, so we need to build more of every tenure in the places people want to live, to make sure everyone can afford a home.”

Call for freeze as report shows rents rising at record rates

Published On: May 19, 2022 at 9:31 am

Author:

Categories: Lettings News,Tenant News

Tags: ,,

The Index of Private Housing Rental Prices report for April 2022 has been published by the Office for National Statistics (ONS). It shows that rents in the UK have risen by 2.7% in the 12 months to April 2022. This is up from 2.4% in the 12 months to March 2022.

The main points of the report also include:

  • Private rental prices grew by 2.5% in England, 1.7% in Wales, and 2.9% in Scotland in the 12 months to April 2022
  • The East Midlands saw the highest annual growth in private rental prices (4.0%), while London saw the lowest (1.1%)

Generation Rent has commented on the ONS Index of Private Housing Rental Prices, highlighting that it shows UK rents rising at their fastest rate since 2016.

Dan Wilson Craw, Deputy Director of Generation Rent, said: “Rents have been surging since offices and universities opened back up last year, and more people moved back to cities than there were homes available. Now landlords are trying to raise rent on existing tenants knowing that if they can’t afford it, it won’t be hard to find a new tenant.

“This is unsustainable, particularly for the 39% of private renters who rely on Local Housing Allowance which has been frozen. With rising food and energy prices, renters will get ill, go hungry and fall into arrears, risking eviction and homelessness. To avoid this catastrophe, we need a freeze on rents and a pause on evictions for the duration of this emergency, and an increase in Local Housing Allowance.”

Decline in London rental stock pushes rents up, estate agent Benham and Reeves reports

Published On: October 20, 2021 at 10:55 am

Author:

Categories: Landlord News,Tenant News

Tags: ,,,

The cost of renting in London has climbed by hundreds of pounds a month, research from lettings and estate agent Benham and Reeves shows.

This is due to dwindling rental stock levels and could continue to do so if the issue is not resolved.

Benham and Reeves analysed both the change in available rental stock across the London market in the last year, as well as how this has impacted the cost of renting across the capital.

Across the whole of London, the number of available rental properties listed on the market decreased by 48% between Q3 2020 and Q3 2021. At the same time, the average cost of renting has increased by £109 per month.

Only the borough of Barking and Dagenham saw the level of available rental stock increase, up 1%. The average cost of renting in the borough has also increased by an average of 1%.

The rest of London, however, has seen the level of rental stock fall by between 10% to 30% year on year. The average cost of renting has climbed by 4%, which Benham and Reeves reports is an increase of £49 per month for the average tenant.

The average monthly rental cost has increased £95 per month in boroughs where rental stock has dropped between 30.1% and 50% compared to last year, resulting in a 6% increase in the average cost of renting.

In 10 London boroughs, the level of available rental stock currently on the market has more than halved in the last year. The cost of renting across these worst-hit boroughs has climbed by 9% on average, equating to a rental increase of £179 per month.

Marc von Grundherr, Director of Benham and Reeves, comments: “Restrictions imposed as a result of the pandemic saw demand for London rental properties evaporate almost overnight and many landlords were forced to dramatically reduce their rental income expectations simply to secure a tenant.

“However, we’ve seen waves of tenant demand return to the capital as social and workplace restrictions have been eased but while this demand is starting to snowball, the level of available rental stock remains notably lower than it was a year ago.

“As a result, the cost of renting has climbed quite considerably in many boroughs, with tenants now paying hundreds of pounds more a month as a result. Should stock levels remain muted, there’s no doubt that this upward trend will continue and the cost of renting in London will climb even further.”

The year on year decline in rental stock levels and the average change in the monthly cost of renting

No. BoroughsDecline in rental stock levels (Q3 2020 vs Q3 2021)Change in Average Monthly Rental Cost (%)Change in Average Monthly Rental Cost (£)
610% to 30%4%£49
1630.1% to 50%6%£95
1050.1% or more9%£179
London48%7%£109
Rental stock data sourced from Rightmove, rental price data sourced from PropertyData. Barking and Dagenham was not included in the above table as it was the only borough to see an increase in rental stock levels (11%) and a 1% increase in the cost of renting

Student accommodation rent prices are up as much as 26% in parts of Britain

Published On: October 7, 2021 at 8:37 am

Author:

Categories: Lettings News

Tags: ,,

Research from Manor Interiors shows that the cost of renting for a student has increased by as much as 26% in some places.

The expert in build-to-rent furnishing solutions has found that the average student in Britain currently pays £132 per week in rent. In London this reaches as high as £152 per week.

However, when analysing the cost of renting for students over the last five years, Manor Interiors found that London is one of just two regions to see the cost paid per week actually fall. In 2017, the average London student paid £182 per week in rent but this has since fallen to £152 per week, showing a 16% drop.

Students in Scotland have seen a -2% decline in rent costs, resulting in them now paying an average of £127 per week.

Meanwhile, students in the East Midlands have seen the largest increase. The average now sits at £129 per week, which is a 26% increase in just five years.

The North West and Yorkshire and the Humber have also seen student rental costs increase by more than 20% since 2017, up by 23% and 21% respectively.

The South West (16%), Wales (14%) and South East (11%) have also seen a double-digit increase, with the North East (9%), West Midlands (7%) and East of England (3%) also seeing an increase.

Farhan Malik, CEO of Manor Interiors, comments: “An extra £11 a week might not seem that significant but every penny counts when you’re a student and over the course of a year, they are now paying a considerably higher price in rent compared to just five years ago.

“The good news is that an increased cost of renting and changes to student financing have not dampened the appetite for university education and we’ve seen a record number of students choose to pursue a degree this year.

“Of course, more students looking to rent a limited level of accommodation is likely to keep rental prices buoyant. Great news for landlords or PBSA providers, but not so great if you’re a student.”

The average student rent per week and five-year change

LocationAverage student rent 2017 (per week)Average student rent 2021 (per week)Change (%)
East Midlands£102£12926%
North West£109£13423%
Yorkshire and the Humber£103£12521%
South West£127£14716%
Wales£106£12114%
South East£132£14611%
North East£112£1229%
West Midlands region£111£1197%
East of England£128£1323%
Scotland£130£127-2%
London£182£152-16%
England£123£1349%
Great Britain£122£1328%
Data sourced from Save the Student