Recent rental market figures show that rental prices have increased, making rental more expensive for tenants. Despite the increase, however, there has also been an upsurge in the number of properties on the market, and the number of properties that have been let. HomeLet, the Deposit Protection Service, and the Office for National Statistics have all provided rental figures, and while they do differ, they all show a significant increase in the average rental value paid by tenants.
A 13.9% Increase In Five Years
HomeLet, which offers tenant checking and referencing services as well as rental insurance, announced that, according to its figures, rental value has increased by 13.9% over the past five years.
The figures also show that the value has increased by 1.8% in June compared to the same period last year. The average rent is now £941 per calendar month, £17 more than in June 2018. Northern Ireland saw the largest annual gains, increasing 4.7% year on year.
Excluding London, where prices are historically higher than in the rest of the country, the average gain remained the same at 1.8% and the average monthly rental value was £781pcm. London’s average value was £1,611 per month, which represents just a 0.9% increase compared to 12 months earlier.
While national prices are catching those in the capital, they still have some way to go to fully bridge the gap.
A 1.79% Increase In The 2nd Quarter
The Deposit Protection Service (DPS), which acts as a deposit holding and mediation service between tenants and landlords, has much lower rental figures, but also recorded gains in monthly rental figures.
Their figures show a 1.79% increase in national figures, but over the whole quarter to the end of June. According to the DPS, average rent is now £771 per month including London. If you take the capital out of the equation, the DPS says that monthly rent is now £673, while London prices equate to £1,319 per month.
The DPS has said that the price rise was driven by an increase in demand following the banning of letting agent fees, but while HomeLet has witnessed a continued growth over five years, the DPS has said this quarter represents the first real increase since the second half of 2017.
A 1.3% Annual Rise To May 2019
The Office for National Statistics (ONS) also saw increases in rental value, roughly equating to a 1.3% rise in the 12 months to May 2019.
England posted 1.3% gains, with Wales not far behind with 1.2% increases, and Scotland posting 0.8% rental increases over the period. It was Northern Ireland, however, that saw the greatest gains, posting a 2% rise in prices, which has been roughly consistent since 2018.
The ONS figures agreed with the DPS, that price movement had fallen flat since 2016, but showed that London rates rose by 0.9%, which undoubtedly help push the overall national figures up.
More Properties “To Let” And “Let”
The Property Activity Index from the Agency Express showed that it isn’t just rental values that have increased, either. Their data suggests that the number of properties “to let” and the number of “let” and “let agreed” properties have also increased significantly.
Properties listed as “to let” in May were up 9.5% compared to a month earlier, and the number of properties that had been let increased 5.3%.
Central England saw the greatest increase in properties on the market, with a 17.8% increase, while it was the North West where there was the greatest increase in properties that were successfully let, increasing 18.6%.
These figures were taken from May, which is significant because a letting fee ban was introduced from June 1st. This means that landlords and agents are now heavily restricted when it comes to charging rental fees to tenants, which could explain the large increase in the number of landlords putting their property on the market before this occurred.
A lot of agents also eliminated their fees early, encouraging prospective tenants to move into new properties in May – a further increase is expected in June, as a result of this.
An increase in the number of properties let means that there is greater competition for properties. Many tenants could be pushed to take properties that cost more than they would have otherwise budgeted for, pushing the average price upwards.
The knock on effect of eliminating letting fees, which can see tenants save hundreds of pounds in administrative fees, means that rental prices could push up higher still in the coming months, and some experts have warned that landlords and agents might increase rental prices to soak up these lost costs.
Rent Today With Haboth Lettings
If you are looking to rent property in Blackpool, or the surrounding Fylde area, contact us at Haboth Lettings. You can view our existing properties here on our website, and we can let you know as soon as any appropriate properties are placed on the market. Call us on 0333 012 4895 and speak to one of the team