Rents Increase 15% Since May 2010
By |Published On: 8th May 2015|

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Rents Increase 15% Since May 2010

By |Published On: 8th May 2015|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

Rents in England and Wales have risen by 15.2% since the last general election of May 2010, found Your Move and Reeds Rains.

This growth is faster than inflation, which was 11.6% in the same period. After the effects of inflation, rents increased by 3.6%. This is a 0.7% rise per year since the last Parliament.

The average rent in March 2015 was £768 per month, found the latest Buy-to-Let Index from Your Move and Reeds Rains.

Annual rent growth is now at the fastest pace for two years, with the average rent in England and Wales up 3.7% in the last year. Rents have not risen this quickly since the year to April 2013, when they increased 3.9% annually.

Between February and March 2015, rents grew by 0.3%. This fell from the 0.4% increase seen in January to February this year. It was also the second month in a row of rental growth after November, December and January saw rents fall, which is common in winter.

After rents rose this year, they are just £2 away from the record high recorded in October 2014, of £770 per month.

Director of estate agents Reeds Rains and Your Move, Adrian Gill, says: “Since 2010, the private rented sector has absorbed over a million extra households. With social housing in decline, alongside a parallel decay in the number of people owning their own home with a mortgage, private renting has stood in to fill the gap.

“With only small real terms rent rises, this has generally been a success, and tenants are now half as likely to fall behind on rent as at the peak of the financial crisis. However, this sector is carrying the weight of the housing crisis, and that will mean faster rent rises in future if supply doesn’t keep up.

Rents Increase 15% Since May 2010

Rents Increase 15% Since May 2010

“Without more homes every year to match a rising population, housing will inevitably become more expensive. And with one in five households now renting privately, this section of the population won’t be an exception to those fundamentals.

“Over the next five years, politicians of all stripes can’t just hope that this problem will go away. Britain needs more homes, and over the long term, investment by landlords will only provide places to live as quickly as those homes are given planning permission and completed.”

Regional rents

The highest annual growth was seen in the East of England, at 12%. The average rental property in this region is now much more expensive than in the South East.

London experienced the second largest rent rises, at 5% since March 2014. Yorkshire and Humberside was third at 3.3%.

Contrastingly, rents in the East Midlands are 0.2% lower than the previous year, and the South West has experienced no annual changes.

On a monthly basis, the East of England has also had the fastest rent increases, up 2.5% on February 2015. The North West is close behind at 2.3%, and Yorkshire and Humberside follows at 0.4%.

Rents in the East Midlands have fallen by 0.6% between February and March, and the North East and Wales witnessed rents 0.5% lower than a month previously.

Gill continues: “Generally the quickest rent rises have traced the most buoyant jobs markets, and this matches a very positive picture for the East of England. By similar logic, the East Midlands had previously seen very robust rent rises to rival London, but this has now tapered out. This could be a pause for breath or signal a deeper slowdown for the East Midlands’ previously powering local economy.

“Another stand-out area is the North West. Rents in this area are outperforming and on the ground we’ve seen this effect clustered particularly around the potent Manchester economy. It’s clear that the North West powerhouse, centred on Manchester, is fast becoming the London of the North, with a deepening premium compared to areas like the North East, North Wales, or much of Yorkshire.

“Each local market can also be split further, into the top and bottom sections of the market. This is most clear in the capital. At the upper reaches of the London market there is plenty of stock, but generally at lower rents, there is a massive stock shortage, as tenancy lengths have increased taking out of the churn in the market and reducing choice.”


The gross rental yield on the average rental property in England and Wales was 5% in March 2015, a steady figure compared to February. However, this is down by 0.1 percentage points since March 2014.

Considering the small rise in property price growth and fewer void periods, total annual returns on the typical rental property were 12.2% in the year to February, not taking costs such as mortgage repayments into account. A year ago, this figure was 10.8%.

Therefore, the average landlord in England and Wales has received a return of £21,078 in the past twelve months, before deductions such as maintenance costs. Breaking down this figure, landlords earned £8,259 from rental income and made £12,819 in capital gains.

If these trends continue, the next twelve months will see the average landlord making a total return of 14.5%, or £26,861. Of this amount, rent will earn them £9,216 and capital gains will make £17,645.

Gill comments: “Rising rents are supporting steady gross yields, in line with the long-run average of just over 5%. And rental yields should stay steady in the immediate future, as market rents grow vigorously while property prices rise at a similar rate. However, landlords are also benefitting from steady price rises, as the bonus of capital accumulation adds considerably to total returns.

“Tenants looking for the lowest possible rents depend on landlords investing in new properties to keep up with growing demand for places to let. Yet if and when those same tenants start looking for a home to buy, they often find themselves in competition with landlords to buy a home. Again, building more homes is the only way around that dilemma. But in the meantime, healthy investment and competition between landlords should help tenants avoid excessive rent rises.”

Tenants’ finances

In March 2015, 7.4% of rent was in arrears, down from 7.6% in February. This is also lower than the 7.8% of late rent a year ago.

In the longer term, rent arrears are improving significantly. At the last general election in May 2010, 10.7% of all rent due was in arrears, following the record high of 14.7% in February 2010.

Gill concludes: “While renting is becoming more expensive, it appears this is driven by an improving jobs market and above all by real progress in people’s wages.

“Tenants as a whole are managing to keep on top of rent today better than in previous years. The proportion of rent owed to landlords has halved since its peak at the start of 2010.

“That said, recovering from the financial crisis has taken half a decade, and it remains to be seen how quickly a better economic picture will make inroads into the remaining cases where tenants are falling behind on rent. But the long-term trend is clear and it’s going the right way.”1


About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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