The rental market in the UK seems up and down at the moment and very much dependant on location with some figures showing rents rising, and others that they are falling.
It is all part of the general movements in the market and the question everyone wants to know is what the longer term trend is going to be so opposing figures can be confusing.
For example, the latest set of figures from HomeLet shows that average rents UK wide increased by 1.6% in the 12 months to May 2019 and of the 12 regions monitored by the index, all except Yorkshire and Humberside and the North East showed an increase in rents.
The biggest annual rise was 4.9% in Northern Ireland, followed by 3.7% in the East Midlands, 2.9% in the South West, 2.2% in the West Midlands, 2.1% in the South East and 1.9% in the North West.
But on a monthly basis rents fell by 0.2% across the UK. The biggest decline was a fall of 1.5% in Scotland while rents also fell by 0.9% month on month in London and the West Midlands. They were down 0.2% in Yorkshire and Humberside and the South East.
Then the Goodlord index shows that in England and Wales rents fell by 1.7% month on month in May but they increased in four regions. This index also looks at what has been happening so far this year and shows that the West Midlands has seen rents increase by 7.8% in the first five months of the year and the South East up by 6.1%.
So, it is a mixed picture and comes at a time when new research says that higher rents are reducing the financial gains from moving so that young people are less mobile than they were 20 years ago.
The number of young people aged 25 to 34 starting a new job and moving home in the last year has fallen from 30,000 in 1997 to 18,000 in 2018, the analysis by the Resolution Foundation, funded by the Nuffield Foundation shows.
This fall is all the more surprising, it says, given that young people today are far more likely to live in private rented accommodation rather than own a home or live in the social rented sector.
Indeed, young private renters’ propensity to move areas for work has fallen by two thirds over the last 20 years. While a greater share of private renters today have children, which can make it harder to move, this only explains a tiny part of the fall in job mobility for young private renters, it explains.
The analysis identifies an alternative explanation for falling job and home mobility which is that the financial incentives for moving are lower. That is partly good news, it says, as the country has seen employment gaps fall, meaning fewer young people are forced to move away from employment black spots to find work. The average gap between highest and lowest employment areas of the country has fallen by almost a fifth since 2000.
But it also reflects the fact that private rents have risen fastest in higher paying areas of the country, rising by almost 90% the among highest paying local authority areas, compared to just over 705 among the lowest paying. This has significantly reduced the living standards uplift from moving for work once housing costs are factored into the equation.
But it is possible that more and more people will continue to rent with Build to Rent investment growing. A forward looking analysis from letting compliance firm VeriSmart says that if people renting a home continue to do so and not move onto the housing ladder at present rates then the UK will see more renting than owning a home by 2039.
Currently home owners account for 65% of the housing market, a fall of 5% since 2010. If there is no change in tenures then that is set to become 50.7% renting and 49.3% owning within 20 years. The analysis suggests that by 2045 this will have grown to 55% of the nation living in the rental sector and 45% owning their own home.
It suggests that this is not a trend driven out of necessity but rather people choosing to rent within the private sector, as during this time the number in social rental accommodation has also dropped.
All of these changes are making the rental sector a more attractive place to be and this is backed up by stricter controls in terms of fees, deposits and professionalism in the private rented sector. Cultural change could be coming but meanwhile it is back to taking the figures with a pinch of salt as they are dependent on what is happening at a local or regional level rather than nationwide.
Ray Clancy, editor
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