According to data from Your Move, buy-to-let index, average rents across the UK are now at £798pcm. Average rent in the North West is £677pcm, up from £661pcm last year, an increase of 2.5% (figures from Home Let Rental Index). More than half of landlords surveyed by Home Let indicated they would need to increase their rent in the next 6-12 months. While 76% of landlords had no intentions of expanding their rental portfolio.
While London still has the highest rent in the country with an average of £1,280pcm it has dropped in this city by 1% over the last year and down 0.5% in last month. This suggests that London has reached an affordability ceiling and renters are looking further afield for cheaper rental property. Valerie Bannister, lettings director at Your Move has stated that: “The dramatic rent increases in London have now slowed as people look outside the capital in order to meet their housing aspirations”.
The index also shows that yields have fallen slightly to 4.1%, from 4.2% last year. Places with higher house prices tend to have smaller yields. In London average yields are just 3.2%, down from 3.6% a year ago; while in the North West typical yields are 5%.
These figures are set to further increase if landlords are to be burdened with extra charges from their agencies as a consequence of the ban of tenant fees. Most agencies will be likely to pass on 75% of the fees lost from tenants to the landlords, landlords will pass on this cost to their tenants by increasing rent. ARLA have said that the move could also result in less investment from landlords, further hitting supply and putting more upwards pressure on rents as competition between prospective tenants heightens. David Cox, chief executive of ARLA Propertymark has stated: “For many tenants, buying a property simply isn’t an option, and they must depend on the private rented sector to provide security, good standards and fundamentally, a home”.