Tenants are adopting a longer-term view to renting property, with more private renters looking to renew their existing contracts, new research by Hamptons International shows.
As the nature of the rental market continues to change, it would appear that both tenants and landlords are benefitting from longer tenancy agreements.
In August there were 2.5% more tenancies renewing across Great Britain than last year, with rental growth on renewed tenancies rising by 2.8%, which is the highest level in 10 months.
This is particularly true in London, where the number of tenancy renewals has risen 3.7% so far this year compared with the same period in 2017.
Renewal rents in London have risen for the last three months, reaching 3.2% year-on-year in August.
The findings are unsurprising given that tenants want to feel settled and landlords want to reduce tenant void periods in their rental property.
With less stock available on the open market to choose from, Hamptons International reports that average rents on newly let properties is also increasing.
Across Great Britain, the average rent of a new let rose to £975pcm in August 2018, led by gains in the Midlands and Wales with rents on new lets up 3.3% year-on-year and 4.4% respectively.
However, London rents on newly let homes fell for the third consecutive month, down 0.8% year-on-year.
The capital remains the only region across the UK where rents are falling.
Aneisha Beveridge, analyst at Hamptons International, said: “Despite low stock levels, rents on newly let properties fell in London for the third consecutive month. Moving is costly for both tenant and landlord. In a period of uncertainty, where tenants’ incomes and landlords’ yields are squeezed, more tenancies are being renewed.
“With affordability stretched and less choice available on the open-market, more tenants are choosing to stay put. And with landlord yields under pressure from high property prices and tax changes, fewer landlords want to run the risk of looking for a new tenant and suffering void periods.
“But rents outside London continue to rise. Wales and the Midlands have driven rental growth outside the capital to increase 2.0% year-on-year, the strongest growth in nine months.”