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Rental Prices Continue To Grow

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Rental Prices Continue To Grow

Private rental prices paid by tenants in Great Britain rose by 2.6% in the 12 months to February 2016, unchanged when compared with the year to January 2016.

Private rental prices grew by 2.8% in England, 0.2% in Wales and 0.7% in Scotland in the 12 months to February 2016.

Rental prices increased in all the English regions over the year to February 2016, with rental prices increasing the most in London (3.8%).

Conditions in the housing market as a whole may have been supporting rental price growth. Data from the ONS House Price Index release for January 2016 shows that house price growth has typically been stronger than rental price growth for a number of years, while the Bank of England's Agents' Summary of Business Conditions for Quarter 4 (Oct to Dec) 2015 reported that private rental demand continued to grow steadily in the 3 months to December. RICS's Residential Market Survey for February 2016 also noted that tenant demand continued to grow at a robust pace for the 14th month in a row. The strength in demand is in contrast to supply: the latest RICS survey found that new landlord instructions increased modestly in February 2016 for the first time since October 2015 and the Association of Residential Letting Agents (ARLA) reported in January 2016 that the supply of properties was at its lowest in a year. However, there are marked regional patterns in conditions, as noted by ARLA.

Rental prices have been growing at a slightly faster rate than real wages in recent months.

Rents in the South East have risen 2.9% over the last year. (According to new experimental ONS statistics to Feb 2016)

Over the previous year prices rose at about 2.2%

This does not necessarily mean that rents for your property should be going up at this rate. This is an average rate for all property types and over a large area. Regional variations are considerable. Attainable rents depend mainly on the supply situation at the time. Agents tend to push up rents when their stock is low and these conditions vary from month to month.

The best way to work out what rent you could ask for your property is to search for similar properties in Rightmove or Zoopla.

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About the author

Martin Silman

Martin began his landlord journey 30 years ago, while working in an international role for a global telecommunications company. Since retiring he has extended his portfolio, which he manages with his wife, but has always focussed on the ‘small student HMO’ sector preferring to offer homes in the community for small groups to the more common ‘pack them in and take the money’ mentality. He has chaired the PDPLA for the past 12 years and has overseen the Associations transition from small local self-help group to a much larger and more professional institution which is recognised and listened to nationally. Alongside his PDPLA role, he also has leadership roles in a number of other local organisations – bringing his unique perspective, driving for change and increased use of technology while respecting the history that brought us here.

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