Average rents in the UK up and new tenancies all see considerable growth
National average rents in the UK continue their upward trend and new agreed tenancies are at a three year high across the country, according to the latest index report.
Average rents are now £781, up 11% annually, and have overtaken the record level recorded in August while new tenancies are up 5% month on month and 7% annually, the Sequence Group index shows.
The data also shows that in London’s average rents stand at £1,456, growth of 7% annually and tenant demand in London is up 1% on the month, with five applicants per property.
This comes at time when the supply of rental properties is falling. The number of new rental properties is down 4% nationally and down 5% in London. There is also an increase in buy to let mortgages, up 15% on the month and up 46% annually as buy to let continues to be a popular investment choice.
‘As the sales market ignites the rental market continues to grow. The flexibility of renting remains attractive to tenants although we are noticing that renters are looking for more security in this fiercely competitive market.
This has pushed the average length of tenancies from 12 to 19 months,’ said Stephen Nation, head of lettings at the 300 branch Sequence Group which includes Barnard Marcus, William H Brown, Fox & Sons and other leading brands.
‘New agreed tenancies are at a three year high with levels of demand up 9% annually across the UK and average national rents are also up 11% annually. The buoyancy of the market and low interest rates are continuing to attract buy to let investors in their droves, with the number of applications for buy-to-let mortgages up an unprecedented 46% annually, which is the largest annual growth for three years. This growth should impact supply over the coming months so we expect to see the number of properties available increase before the end of the year,’ he explained.
He pointed out that the London market remains defined by a supply deficit, with more than five people applying for every new rental property. ‘This disparity has been caused by a 1% monthly increase in tenant applications, coupled with a 5% monthly decrease in supply. If this under supply continues it could continue to push rents up further in the capital,’ he added.