Rents outside London rise 2.3% in year to December

The most recent data released by the Office of National Statistics reveals that rents paid by private sector tenants in Britain outside the capital increased by 2.3% in the year to December 2016.

This figure was unchanged for the fifth month in succession.

Regional Rents

In England, rents rose by 2.5%, while in Wales there was an increase of 0.3%. In Scotland meanwhile, rents were up by just 0.1%.

All regions of England saw increases in private rents during the year, with rents in the South and East rising more than those in the North. In London, rents were up by 2.4%.

Inflation in the rental market is likely to have been caused by ever-growing demand in the market outpacing supply in a number of regions.

Rises

Further analysis of the report shows that investors with landlord insurance on a property in England have increased rents by an average of 14.1% between January 2011 and December 2016.

This growth was driven by the increase in rents within London. Taking the capital out of the equation, private rental prices rose by 9.9% in the same period.

Wales and Scotland however have seen slower growth rates. In Wales, the annual rate of change has not hit 1% since March 2012, while in Scotland, rental growth has slowed to 0.1% from a high of 2.1% in June 2015.

Rents outside London rise 2.3% in year to December

Rents outside London rise 2.3% in year to December

Lack of Supply

Tarlochan Garcha, chief executive officer of property lending platform Kuflink, noted: ‘Rental demand is soaring as homeownership continues to become a distant dream for many. A critical lack of supply is being outstripped by demand, especially in London where the average house price is fast approaching £500,000.’[1]

Garcha notes that demand is likely to rise further in cities such as Manchester, Leeds and Newcastle, as the Government spends money on regeneration and transport links in these regions.

‘Added demand for rental accommodation from both students and graduates thanks to their flourishing universities could further contribute to rising rental prices in these areas,’ he added.[1]

[1] http://www.propertywire.com/news/uk/rents-outside-london-2-3-year-year-flat-fifth-month-row/

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