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Bad news for tenants, as average rents rise to £865

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Written by: Antonia Di Lorenzo
01/02/2019
The West Midlands saw the greatest increase in monthly rents, but the average of £630 is still only half of what London tenants pay
Bad news for tenants, as average rents rise to £865

Average rents rose by 1.8% last year across England and Wales, ending 2018 at £865 per calendar month, data showed.

The South West saw the largest annual rise, increasing by 4.1% to hit an average of £702, according to the latest figures released by Your Move.

The best performance emerged from the West Midlands, where rent grew 0.5% month-on-month to take the average rent up to £630.

In the East of England, the average rent is now £881, which represents a 1.4% fall compared to December 2017, while in the South East, prices rose by 1.2% to reach £897.

London remains the most expensive place to rent property in England and Wales, with rents remaining stable across December.

However, prices here dropped year-on-year, with a price fall of 0.8% leaving the average rent at £1,263.

Average yields

Across England and Wales the average also remained the same, at 4.3%. The North West, West Midlands, Wales and the East of England all ended the year with smaller yields than they did a year previously.

However, the East Midlands bucked this trend with the average returns rising to 4.2% year-on-year.

The two most northerly regions continued to have the best percentage returns for landlords. In the North East the average yield was five per cent while in the North West it was 4.8%.

The report found that this year 10.5% of all tenancies ended the month in arrears of some kind. This is much higher than the 8.1% recorded in November’s survey, but a spike in arrears is to be expected at this point in the year.

Despite the rise, the proportion of tenants in arrears remains well below the both the recent and all-time high recorded by Your Move.

Martyn Alderton, national lettings director at Your Move, said: “While the rental market tends to wind down as we reach the end of the year, there were still some positive advancements this year, with prices rising in all but two regions.

“While landlords in most areas saw their yields squeezed in 2018, there was good news as returns held firm between November and December.

“Tenant arrears have spiked compared to November, but this often occurs at this time of year.”

Rent rises

The number of tenants experiencing rent increases fell for the fourth month in a row in December, with 18% of agents reporting that landlords increased rents, ARLA Propertymark revealed.

This is the lowest figure recorded since December 2017, when the number of tenants experiencing rent rises was 16%.

The supply of properties available to rent rose to 193 per lettings branch in December, up from 183 in November.

Year-on-year, this is down 4%, compared to 200 in December 2017.

Demand from prospective tenants decreased in December, with the number of house-hunters registered per branch dropping to 50 on average, compared to 55 in November.

Year-on-year this is also down as agents had 59 prospective tenants on their books per branch in December 2017.

ARLA Propertymark, chief executive, David Cox, said: “With the Tenant Fees Bill passing its final hurdle in Parliament last week, it is now waiting to receive Royal Assent before being passed into law and implemented on 1 June.

“This means it’s only a matter of time until we could see rent prices starting to creep up again.

“Landlords have faced continued regulatory change and increasing costs over the last few years, and the tenant fees ban will only add to this burden meaning many will either have to start increasing rents for tenants or exit the market.”

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