Leicester, Southall and Cambridge showed highest rental price growth in 2014, according to data from HomeLet.
Rents in these areas were respectively 45%, 38% and 24% higher in 2014 than 2013.
Meanwhile Colchester, Croydon and Brighton saw the biggest falls in rental prices in 2014 with rents on new rental agreements respectively 24%, 23% and 18% lower.
The HomeLet Rental Index annual review has shown that on average, rents across the UK in 2014 were 6.6% higher than in the previous year with the average monthly rent in the UK now standing at £867.
Martin Totty, Barbon Insurance Group’s chief executive officer, said: “2014 was predominantly a year for growth in the rental market with rental prices on average 6.6% higher than in the previous year. With property prices continuing to grow, and mortgage criteria tightening, the rental market represents a much more accessible option for house hunters than the property ladder. The demand for rental property is increasing, and we expect it to continue doing so in 2015 as large numbers of people are priced out of buying. As a result, we expect to see continued growth in rental prices across the UK as the new year progresses, particularly as real incomes are starting to rise.”
“However, the data also points to some big differences in rental market performance in 2014 from town to town and city to city. The causative factor behind these differences is as simple as supply and demand. In, locations such as Leicester and Cambridge, demand for rental property is outstripping supply. By contrast, Croydon and some parts of Essex are benefitting from a relative boom in new property building, easing the pressure on the local rental market and this is reflected by a drop in rental prices.”
The monthly HomeLet figures for December 2014 point to a rental market that has seen largely positive growth throughout the year, even allowing for the typical end-of-year seasonal adjustment in the market. While rental prices fell in many regions of the UK in December, the annual variation figures for December are in positive growth for ten out of 12 UK regions.
“The moderation in rental prices across the UK in December 2014 is broadly in line with the typical seasonal effect that often sees rental prices slow or move into negative growth towards the end of the calendar year,” said Totty, “However, the annual comparison figures show that in all but two regions of the UK, rental prices are higher now than they were this time last year and this is a trend we expect to continue in 2015.”
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