Rents leap four per cent in three months, but big regional differences

HomeLet’s latest monthly index shows a four per cent surge in the all-UK average rent over just three months, but there are significant regional variations.

The insurance company says the average rent in the UK is now £987, up just 0.2 per cent on last month but a full four per cent higher than June’s figure of £951. 

When London is excluded, the average rent in the UK is now £828, up by 3.9 per cent year-on-year. 

Seven of the 12 regions monitored showed an increase in rental values between August and September this year, with the North East seeing the biggest increase of 2.2 per cent.

In September - last month - the average rental value in London (£1,646) was a remarkable 99 per cent higher than the rest of the UK, excluding London. 

Looked at on an annual basis, 10 of the 12 regions showed an increase in rental values between September 2019 and September 2020, with the South West seeing the highest increase of 6.6 per cent. 

However, rents in London are down year on year, showing a 2.8 per cent fall; Northern Ireland also shows a yearly decrease, also with a 2.4 per cent fall between September 2019 and September 2020. 

“Whilst it’s undoubtedly the case many landlords are being supportive of their tenants and agreeing temporary reductions or deferrals, it will be encouraging for them to see rents agreed on new tenancies, in almost all parts of the country, are continuing to hold up and generally edge forward” says Martin Totty, chief executive at HomeLet.

“This is likely because tenant demand remains strong whilst supply may be a little more constrained if some landlords are selling into a stronger sales market, even if that could be a short term phenomenon. It also doesn`t help tenants much if, for them, the prospect of securing first time mortgage finance remains as elusive as ever” Totty continues.

“So, those landlords committed to the sector for the long term and having shown their willingness to confront the multiple headwinds of: taxation change; new regulatory requirements; and, in certain circumstances, longer notice periods to gain possession of their properties, may still be rewarded for their flexibility and their perseverance with reasonable returns on their investment risk.” 

Region	September 2020	August 2020	September 2019	Monthly Variance	Annual Variance
South West	£902	£899	£846	0.3 %	6.6 %
North East	£558	£546	£535	2.2 %	4.3 %
East Of England	£967	£954	£927	1.4 %	4.3 %
North West	£770	£781	£739	-1.4 %	4.2 %
West Midlands	£747	£739	£718	1.1 %	4.0 %
East Midlands	£678	£670	£653	1.2 %	3.8 %
South East	£1,074	£1,070	£1,045	0.4 %	2.8 %
Wales	£650	£641	£634	1.4 %	2.5 %
Yorkshire & Humberside	£673	£678	£657	-0.7 %	2.4 %
Scotland	£683	£692	£676	-1.3 %	1.0 %
Northern Ireland	£657	£668	£673	-1.6 %	-2.4 %
Greater London	£1,646	£1,653	£1,694	-0.4 %	-2.8 %
UK	£987	£985	£967	0.2 %	2.1 %
UK excluding Greater London	£828	£825	£797	0.4

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