Advertised rents in the UK fell by 1.25% year on year in the fourth quarter of 2018 but there is considerable variation depending on location, the latest letting agent index shows.
The average ranged from £605 in the North West of England, to £662 in the East Midlands, £733 in the South West, £1,033 in the South East and £1,328 in London, according to the index from Belvoir.
Even within London there is a variation with the index report showing that they ranged from £1,199 in Uxbridge up to £1,542 in Kingston upon Thames.
The firm’s analysis of property types shows that 60% to 70% of rents for flats and two to three bedroom houses remained fairly static, but for four to five bed houses there is a stock shortage and higher demand so rents have increased in this sector.
The report also shows that tenants are remaining longer in properties, with a slight increase in the proportion of tenants renting 13 to 18 months and over two years, when compared to the previous quarter.
Half of Belvoir’s offices reported less than three tenants in arrears. Those tenants who did fall into arrears were much more likely to do so because of sickness or job losses, rather than an inability to pay due to rental increases.
The analysis of landlord trends revealed that a similar number of landlords selling up to three properties to what was recorded in the third quarter of the year and a decrease from 28% to 23% for landlords selling four to five properties.
‘The main reasons for landlord sales are tax changes, constant regulation and legislative changes resulting in less returns, and some landlords choosing to release capital or move back into properties themselves,’ said Belvoir chief executive officer Dorian Gonsalves.
He pointed out that the number of landlords buying properties continues to fall, down to 32.3% in the fourth quarter of 2018 from 37.9% in the third quarter which he said has added to stock shortages.
‘Historically during times of political uncertainty, as is being currently experienced, Belvoir offices have observed a rise in the numbers of families renting properties, as they wait to see the impact on the market and their personal situation,’ Gonsalves explained.
‘In recent years there has also been a shift in the corporate relocation market, with employees opting to rent out their existing property instead of selling, and then renting a house in the new area. This has resulted in less rental houses coming onto the market, with increased demand for those properties that are available,’ he added.
‘As political uncertainty continues it will be interesting to see how the Private Rental Sector will be affected throughout the rest of 2019. After a relatively flat period of rental inflation we are predicting that rents will begin to increase at a faster rate in the second half of the year, as landlords and tenants begin to feel the effects of increased costs, which are a direct result of the tenant fee ban,’ he concluded.
