But the picture is not universal. While there were significant increases in average asking rents in regions that typically experience slower growth rates, some of the stronger regions saw rents fall, the Move with Us rental index also shows.
For example, the North East, which saw an average rise for the quarter of £58 or 9.16%, Wales with an increase of £59 or 9.62% and Yorkshire and Humber with an increase of £36 or 6.38%, are driving national growth.
But prospective tenants in the strongest performing regions of greater London and the South East saw rents fall by an average of £12 and £24 respectively in the fourth quarter of 2013. The decrease recorded in the last quarter of 2013 in these regions, however, comes following strong growth in the first half of last year.
According to Robin King, Move with Us director, increasing rental prices have raised the question over whether the average asking rent for tenants could surpass £1,000 per calendar month in 2014.
‘Overall average rents are rising in the UK, and coupled with the lack of supply for prospective buyers in the sales market, means more people are renting. Landlords have responded to the change in the market by raising the standard of rental properties and lengthening contract terms to provide tenants with security and better living conditions so renting is a viable alternative to buying,’ he said.
He pointed out that the drop in average rents in greater London and the South East is seasonally typical as demand for rental properties decreases in the run up to Christmas. ‘We expect that this will correct itself in the first quarter of 2014 as we are already seeing an influx of tenants looking to move at the start of the New Year,’ he explained.
‘Average asking rents in the usually slower performing regions such as Wales and the North East went against the seasonal trend in the last quarter of 2013 and increased, closing the gap between the cheapest and most expensive places for tenants to rent in the country. This is likely to have been caused by the lack of supply in the sales market in the North of England which pushed rental prices up by almost 10% in areas such as Wales and the North East,’ he added.
The index shows that December proved to be a time of stability and growth for the South West, countering the typical seasonal pattern, as advertised rents increased to an average of over £819 per month for the first time since February 2013. Rents for the last quarter of 2013 were up by 4.97%, equivalent to £39 per month when compared to the period from July to September and an increase of 1.24% against the same time in 2012.
The average advertised rent in East Anglia for the fourth quarter of 2013 was £895 per month, having fluctuated slightly by just five pence from the third quarter of 2013. This is only £4 shy of the highest average rent achieved in the region in 2013, which reached £899 per month in August. When measured against Q4 2012, average rental prices in the last quarter of 2013 were up by 4.07% or equivalent to £35.
Throughout 2013, average asking rents in the region continued their decline in the East Midlands despite still being stronger than the figures recorded in 2012. However, this trend was reversed during the last quarter of the year when rental prices reached an average of £650 per month. This is the highest average price over the year and a significant increase of £34 on the previous quarter.
Average rental prices in the West Midlands stabilised during the third quarter of 2013 as rents increased on average by just 0.19%. However, the last three months of the year proved to be more positive for the West Midlands’ market as rents increased on average by £13, with December being the strongest month of the year. Average rents surpassed £670 per month in December, the highest they have been during the 12 month period.
After a year in which the average advertised rental price in Yorkshire and Humber declined to £590 per month, the last quarter of 2013, and specifically December, saw a sudden and dramatic reversal of this trend. Average advertised rents ended the year up by £36 or 6.38% on those of the previous three months.
Average advertised rents in the North West hit the lowest they have been over the course of the year in October when they were £615 per month. The last two months of 2013, however, were more positive as rents rebounded slightly to finish at an average of £630 per month. This is an increase of £11 or 1.88% from the third quarter of 2013 but still just under £4 behind the 2012 average.
The sudden and sharp increase of advertised rents in the North East during November from £660 to £740 per month was unexpected after a year in which average rents fluctuated between £650 and £680 per month. As a consequence, average rents in the region outstripped the previous quarters by £58, equivalent to an increase of 9.16%. A quieter December and a return to a more measured average of £706 per month at the end of the year meant that advertised rents stood £15 or 2.42% behind the end of 2012.
The decline in rental prices in Scotland which began at the end of the third quarter of 2013 hinting at instability in the market, continued throughout October and November as average rents hit a 12 month low of £644 per month. Having remained constant for the majority of the year, sitting between £670 and £680 per month, the steep drop in rents meant that rents continued to fall in the fourth quarter of 2013 to levels similar to those seen at the beginning of the year.
Average advertised rents in Wales have been on a steady decline since the beginning of 2013. Having begun the year at an average of £680 per month, rents fell to a 12 month low of £625 per month in October. However, following a steep rise in average advertised rents in November, the market finished the year in a stronger position than it started at £686 per month. This is an increase of £59 on the previous quarter and £8 on the 2012 average.
