UK rental growth shows far higher rents than 1 year ago

UK rental growth shows far higher rents than 1 year ago

The UK has seen a slight slowing in the rate at which rental prices have been growing in the last three months, but they continue heading in the right direction for investors and are far higher than they were a year ago. 

Private rented sector investors have seen the market go from strength to strength over the past few years, and the past 12 months has been no different. The HomeLet Rental Index shows that in the year to the end of August, rental prices have climbed by 10.5 per cent.

Nationwide, the average new tenancy agreed climbed to some £992 per month. In the three months to the end of August this was backed up by a 1.6 per cent increase, and although it was marginally lower than the 2.2 per cent in evidence in the quarter prior, it still marked a strong period for the rental market, showing how it continues to head in the right direction for investors.

Martin Totty, chief executive officer of the Barbon Insurance Group, HomeLet’s parent company, said that rental prices continue to move faster than house prices, which only improves yields across the board for those putting their money into buy-to-let assets.

“Rents continue to run slightly ahead of house prices, with the majority of the UK still experiencing rising rents, albeit at a much slower pace than we saw in the early part of 2015,” he said.

“On an annualised basis, however, rents in most regions are still significantly higher than the same period a year ago, with only the North West reporting lower rents for new tenancies in the three months to August 2015 than for the same period last year.”

Mr Totty concluded that the latest round of figures shows just how robust the market is at present, giving those with assets in the sector real reason to believe that there is a long-term prospect for real growth in returns.

London-based property consultancy, Experience Invest has witnessed an increase in investor demand for residential buy-to-let property investors in light of the overwhelming demand for rental properties in the UK.

“Over the last year we have seen the demand for residential buy-to-let skyrocket. Off plan developments in city centre locations have been particularly well received by those looking to generate returns from the UK’s resilient property market.”