Private Rental Sector Rental Prices Continue To Rise
Private Rental Sector Rental Prices Continue To Rise
UK Private Rental Sector Rental Prices
Still Growing Albeit At A Slower Pace
Private rental sector (PRS) monthly rental prices have continued to increase across the UK, although price rises have slowed significantly, reaching a new high of £995 (GBP) per month during September, according to new research.
The latest HomeLet Rental Index found that PRS rental prices have slowed to less than double figures, matching the pace of property value increases in the UK, after a nine month period of sustained rapid growth. The research estimated that the annual increase of PRS rents across the UK averaged 8.5% in September 2015.
PRS landlords are taking positive action to ensure that they can guarantee their rental income despite the rising costs of operating their rental property business by using Rent Protection insurance, which ensures continued rental income even if their tenants suddenly experience a change in circumstance and can no longer meet rent payments. In a rising market, such insurance has been a vital tool to help cashflow.
Two thirds of all UK regions are still recording annual rental price growth due to continued strong tenant demand and an under supply of available rental property.
The largest annual rental price increases have been recorded in the following UK regions:
- Scotland – 8.4%
- East Midlands – 7.7%
- Greater London – 6.6%
The research data also shows three UK regions in negative annual price movement, these are:
- North West – Down 4.6% on 2014
- East Anglia – 2.2% lower than 2014
- Northern Ireland – 1.4% lower than 2014
Comparing the average regional rental price increase data for September to the 3 months previous, the data shows that only three UK regions recorded rental price increases, these were:
- Scotland – PRS rental prices increased by 1.2%
- East Midlands – PRS rental prices increased by 1.4%
- West Midlands – PRS rental prices increased by 1.4%
Every other region of the UK observed a modest fall in rental prices in the three months to September 2015, with the largest rental price reductions seen in:
- South West – PRS rental prices decreased by 2.4%
- North East – PRS rental prices decreased by 2.3%
- North West – PRS rental prices decreased by 2.2%
Affordability has always been an important factor for attracting tenants and has a direct effect on determining rental prices in many UK regions.
Inflation and rental income will have a bearing on future rental price trends especially where tenant demand exceeds the supply of properties coming to the market. Many landlords may be tempted to set rental prices at the top end of their regional market, only to face long periods of rent default because tenants are struggling to afford to keep up with escalating costs.
