Rent values in the South West and in Scotland continued to rise sharply in the three months to July, according to a new report.
The HomeLet Rental Index indicates that rent prices rose in many regions of the UK during the period, with many areas either keeping pace with or exceeding the rate rises seen in the capital.
Data from the Index shows that average rents agreed for new tenancies in the second quarter of 2015 in the UK was £977 per month. What’s more, the typical rent price was found to be 11.8% at the same time in 2014.
In addition, figures from the report show that all regions, with the exception of the North West, registered a rise in rent values over the period.
Values in the South West of England for rents agreed in the first three-months of 2015 were 11.4% greater year-on-year. Scotland recorded an annual rise of 11.2% while the South East saw prices 10.3% higher in the three-months to July than at the same time in 2014.
In the capital, average rents for new tenancy agreements are more than twice as much than in the rest of the country, in cash terms. For new agreements in the three months to July, rents were 9.5% more than a year ago.
Martin Totty, Chief Executive Officer of Barbon Insurance Group, the parent company of HomeLet, commented, ‘the July HomeLet Rental Index demonstrates just how broad-based the rise in rent prices has now become-this is a UK wide trend.’ He noted that, ‘regions which have long been associated with a buoyant rentals sector, such as London, continue to experience rising prices, but rents are also rising in many other parts of the country at similar rates.
Scotland and South West show big rent rises
‘The South-West of England, for example, is benefiting from its popularity with those attracted to the area for lifestyle reasons, as well as the strong local economy in many of the towns and cities of the region, Totty continued.’
Mr Totty went on to say that, ‘over the past few years, price trends in the rental market and house purchase market have been very similar. However, across the first half of this year, house price growth has slowed whilst rental values have continued to increase, perhaps reflecting a change in the relative attractiveness of renting versus buying over this recent period.’
He also feels that, ‘with early signs of the cost of mortgage finance starting to edge up, it will be interesting to see if this recent trend continues or if the change in buy-to-let mortgage interest tax relief announced in the Summer Budget has any indirect impact on rental values with some suggesting it could further stimulate rental values over time if supply of rental properties is constrained as a consequence.’