Average rent rises 3.5% in UK

Average rent rises 3.5% in UK

Continued demand for rental accommodation leads to average rent increase and a positive market outlook for investors.

Summary:

  • Investor market is secure with 64% of tenants planning to continue renting for at least a year
  • Rental standards improving as 90% of tenants say they are happy with their landlord
  • Cost, attractive location and low crime rates are ranked as important factors when renting 

The cost of a tenancy outside of London rose 3.5% compared to last year, a study by HomeLet stated.

With demand for rental properties higher than supply, rental yields continue to outpace inflation. Some cities have experienced more substantial rent increases, including York, where an average 26% rental growth was recorded over the past year.

The research also underlined the growing disposition to rent – of 15,000 tenants, 64% planned to continue renting for a year or longer. The flexibility renting provides led almost a third of tenants to state they weren’t currently interested in buying their own home, with 66% of those aiming to buy citing saving for a deposit as the biggest hurdle.

With 90% of tenants happy with their landlord, the standard for rental accommodation remains high. While 87% of tenants stated rental cost as an important factor, 75% listed attractiveness of the surrounding area and 70% a low crime rate as other important considerations.

Martin Totty, Barbon Insurance Group’s Chief Executive Officer, said: “Almost nine out of 10 tenants told us that they were happy with the standard of their current rented property; and the majority of tenants told us they were happy with the service provided by their landlord or letting agent.

Whilst we are seeing upward pressure on the rental market it’s important that the sector continues to drive professional standards forwards for mutual benefit of tenants, landlords and letting agents.”

The combination of tenant demand for rental accommodation and average yields of around 5% has led to the impressive performance of investment property in comparison to other assets, including shares and savings accounts.

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