Rents Fall Despite Rental Demand
UK PRS Rents More Affordable
The typical residential property rent in England and Wales dropped by 0.4% to £717 a month in November, the first month-on-month fall since January.
But despite the seasonal decline, the average rent for a property is still £25 a month more expensive than it was this time last year.
Rents have risen in all regions over the last 12 months, with London and the South East experiencing the fastest rises annually at a rate of 4.2%.
The typical monthly rent in London stands at £1,033 and in the South East it is £741.
Landlords are looking to avoid having properties vacant over the Christmas period, and are being less aggressive with rental pricing as tenant activity slows in the run up to the New Year.
Across the UK, the limited supply of rental accommodation means there will still be strong upward pressure on rents in the early part of 2012.
Rental demand has remained high as would-be buyers have been unable to get onto the property ladder, faced with having to raise large deposits or finding the terms of mortgage deals too restrictive.
Rents in some parts of the UK bucked the downward month-on-month trend
• London – Rents up 0.3%
• Wales – Rents up 1.2%
• Yorkshire & Humber – Rents up 1.2%
• West Midlands – Rents up 1%
The East Midlands saw the biggest drop over the month, as rents fell by 2.2%
The monthly index, based on analysis of more than 18,000 properties across England and Wales, also showed that tenant finances improved slightly in November despite the squeeze on household incomes, with 9.3% of all rent late or unpaid, compared with 10.1% in October.
Even though a large proportion of current renters would be credit-worthy buyers were they able to provide a big enough deposit to satisfy tight mortgage lending criteria. These tenants are typically financially sound, and less likely to experience payment issues.
UK landlords without Rent Guarantee insurance can expect rental arrears to creep back up next year due to challenges to the economy generally, the threat of the Eurozone crisis and unemployment.
With the cost of moving into a home set to increase for first-time buyers (FTB) when the stamp duty holiday ends in March 2012, the strain on the UK Private Rented Sector (PRS) will be greater than ever, and the cost of renting will continue to increase as the new year progresses.
Legal 4 Landlords spokesman Sim Sekhon said: “UK landlords are in a strong position right now, however unless they take the appropriate steps to protect their rental properties and the income that they provide, that position will change as more regulation is introduced and the tightening of Government Fiscal policies begin to take effect in 2012.
Legal 4 Landlords know how important it is for landlords to protect their property assets. They have worked closely with providers to develop comprehensive Rent Guarantee and Insurance products for UK landlords.