New rental index says average rents continuing to grow
Rents for three-bedroom homes have risen faster than for any other type of property in the past year.
The first ever Landbay Rental Index, released today, is based, where possible, on rents provided by Zoopla.
It shows that average rents for a three-bedroom home rose by 4.6% year-on-year to August, compared with a 3.3% rise for all UK properties.
The Index – which claims to be the first to track rental trends to county and London borough level in terms of number of bedrooms – shows that rents for three-bed rental properties have risen the most in areas within commutable reach of London.
Windsor and Maidenhead has seen the biggest year-on-year rise in rents, with the average three-bedroom property there now costing £1,936 – a 22% rise on last August.
Prices for similar properties in Southend-on-Sea went up by 20% in the year to August to an average of £1,121 per month.
Swindon was up 13% to £813 and the top 10 areas all saw increases for more than 10%.
John Goodall, co-founder and CEO of Landbay, said: “Rents for three-bedroom family homes are racing ahead of the rest of the market at the moment.
“This trend is particularly strong in commuter hotspots outside of London, with 12 of the 20 areas with the fastest growing three-bedroom rents within an easy commute of the capital.
“For investors in the private rental sector, our data makes family homes in the South-East look like an attractive proposition. As well as performing well now, rents for three-bedroom homes saw the smallest falls when rents dipped in 2013.
“The challenge for investors looking to benefit is finding suitable properties for professionals at a cost that produces a good yield.”
The Index, which is put together with the help of mortgage asset analytics provider MIAC, showed the average rent for a UK property is now £1,281 – the 3.3% year-on-year rise closely tracking wage increases (2.9% according to the ONS) but well ahead of inflation.
Southend has also seen average overall rents increase by a large margin, with the average rental property in the seaside town increasing in price by 12.6% year-on-year to £767 per month.
Next come York with a 12.1% increase and an average price of £776, and Wrexham, where the average monthly rent is now £538 – a rise of 11.1% in the year to August.
The biggest fallers were Cheshire (down 6.9%), Aberdeen City (down 5.7%) and Buckinghamshire (down 3.5%).
Goodall said: “At the national level, rents performed very strongly in 2014 after a dip in 2013.
“This year has seen rents continue to grow, but at a slower rate.
“The macro trends at the national level aren’t uniform when you drill into the local level and look at different types of property, which is why we want to establish a rental index that gives landlords, tenants and others interested in the private rented sector access to a more granular level of insight.”
The 2013 dip was due, according to MIAC, to the especially high prices charged during the London Olympics in 2012 which had an effect on rental prices across the country, but mainly in the capital.