According to the Belvoir Lettings Index, which has been running since March2008, there is considerable variation on rent levels according to locations.
‘During 2011 there were frequent reports in the national press about the stratospheric rise of UK rents. However, although the Belvoir Index reveals rental increases in 2011 versus 2010, many regions have still not recovered to the rents achieved in 2008,’ said Belvoir managing director Dorian Gonsalves.
The latest index from Belvoir, which has over 140 offices nationwide but does not have a strong London presence, shows that just five areas across the UK have overtaken the rental heights of 2008.
These regions are London where rents are up 5%, the North East up 6%, Yorkshire up 2% and the South West and West Midlands, both up 1%.
Other regions were up in 2011 compared to 2010, but were still down compared to 2008 heights. The North West is down 3% compared with 2008, the East Midlands down 6% and East Anglia down 5%.
‘We are predicting that this regional rental fluctuation is likely to continue throughout the year, although some areas such as the South East are likely to see a higher increase as rental prices force people out of London into the Home Counties. With regard to other areas I think rents will be relatively stable and any increases are likely to be very modest,’ said Gonsalves.
‘I believe that increased rents and stable or decreasing house prices will result in increased rental yields in 2012. However, this will clearly be very dependent on the outcome of the eurozone crisis and its impact on credit and borrowing,’ he explained.
‘The UK rental market is strong, but landlords should be realistic about the rents that can achieved in their area and talk to specialists who understand the local market, as buying in the wrong area can be very costly. The ability of every Belvoir office in the network to be able to provide an accurate regional analysis of rents in their area rather than applying the national, broad brush approach that has been currently available will be an incredibly helpful resource to potential property investors,’ he added.
According to the Belvoir rental index, in January 2011 the national three month rental average started at £685, peaked at £688 in February and hit a low of £678 in May and June. By the end of 2011, the average rental income in December was £679.
During September 2008 rents reached a height of £709, slipping to a low of £674 in July 2009 (-5%), rising to £697 in 2010 and settling in 2011 at around £680, still 4% below the record heights of 2008.
