A "Conservative" Approach

Rental Growth

The average UK rent on a tenancy signed during the three months to April 2015 was £916, 10% higher than this time last year.

According to the latest Homelet rental index, excluding London rents throughout the UK are 7.4% higher than this time last year, taking average rents to £730. The report also revealed a rise in rents in every borough across the country apart from Wales.

In Scotland average annual rents increase by 6.2% to £635, in Northern Ireland they were up 5.2% to £594, but in Wales they fell slightly by 0.7% to £573.

The report also shows that after a year of rents in London rising at over twice the rate of the UK average, growth rates have now converged with the annual increase in Greater London at 7.5%.

The highest annual growth was seen in the South West at 15.5% followed by East Anglia at 8.4%, taking the average in these regions to £877 and £778 respectively.

In the West Midlands rents are up by 7.9%, the South East saw an increase of 7.4% and Yorkshire and Humber enjoyed a 4.3% increase in rents, taking average prices to £645, £916 and £598 respectively. In the North East they are up 3.9%to £526, 3.8% in the North West to £668 and in the East Midlands 3.4% to £588.

Martin Totty, chief executive officer of Barbon Insurance Group, parent company of HomeLet, commented: “For the first time we are seeing rent price growth rates in Greater London converge with those across the rest of the UK. During 2014, London rent price growth far outpaced other regions but in 2015 we are seeing the emergence of a different pattern.

"What this tells us is that the private rental market is experiencing demand nationwide and that it is not simply a London phenomenon that increasing numbers of people are requiring privately rented property.

"While there have been periods in recent years where London’s rent price growth has moved more in line with other parts of the UK, most notably during the period following the financial crisis, the capital has always remained significantly ahead.”

He added: “The convergence suggests that after a lengthy period of substantial outperformance in terms of rental increases, the pace of growth in London has slowed while the rest of the UK is catching up.”*

*Source: Property Wire, BBC News