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TODAY'S OTHER NEWS

Rental values look set to ‘hold up well’ as tenant demand grows

Average rents achieved on tenancies in June dropped marginally compared to May, but remain higher on an annual basis, the latest data and analysis from Homelet shows. 

The average rent across the UK dropped in June by 0.8% compared to May to hit £951 a month, according to the latest figures.

But the average rent across the UK increased by 1.1% in June when compared to the same month last year. 

When London is excluded, the average rent in the UK is now £797 a month, up 2% year-on-year. 

The average rent in London ias now £1,583 a month, down by 1.7% on last year.

The rental data once agains reveals wide regional variations across the country, with rents increasing in the last year in eight out of 12 of the regions covered by the research, with two of those regions seeing a rise of more than 5%.

The region with the largest year-on-year rent value increase was found to be the North West, showing a 6.6% increase between June 2019 and June 2020. 

Martin Totty, chief executive at HomeLet, said: “June appeared to be an encouraging month for lettings – HomeLet received more applications for tenant reference checks this month than in the same month last year – but it`s perhaps unsurprising to see average rents achieved on tenancies fell slightly compared to May, albeit still ahead over the year.

“Regional variations were again significant this month, with an annual increase in average rents of 6.6% recorded in the North West, compared with a fall of 1.8% in Northern Ireland. 

“With the current uncertainty affecting different areas of the country in varying ways, looking at trends by region offers the greatest insight into how these variations will affect both landlords and tenants across the country over the coming months.”

However, eight of the twelve regions monitored also showed a decrease in rental values between May 2020 and June 2020, with Wales seeing the largest drop of 1.9%.

In June 2020, average rental value in London was 60% higher than the rest of the UK. 

Totty added: “With demand for new tenancies still strong, rents overall may well hold up at the national level, whilst regional variations could continue to fluctuate, reflecting how any potential economic downturn will likely not fall evenly across the UK .

“HomeLet`s tenant reference data – which is also forward looking – is one of the few sources with access to large data sets underpinning robust regional trend data able to track these changes.”

Poll: With demand for new tenancies still strong, do you expect rents overall to hold up at the national level?

PLACE YOUR VOTE BELOW

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    • 12 July 2020 18:11 PM

    Rents aren't holding up at all.

    There has been a flood of former AirBnB properties back into the long term letting market.

    That along with declining demand due to the many redundancies that have occurred and will be occurring when furloughing ends means rents are down by at least £200 pcm.
    Effectively returning to rent levels of 10 years ago.
    There is simply still too many long term rental properties available.

    Of course if world circumstances change to allow people to move around the world easily then all those former AirBnB properties will revert to AirBnB once the existing long term tenants are got rid of.

    Obviously that won't happen overnight.
    So rents will remain soft for some time.
    The only hope for LL like me; desperate to get out of the game is that the SDLT cuts might enable such LL to offload their rental properties to aspirant OO.
    But rents certainly won't be increasing anytime soon.
    This is a real problem for S24 LL who are subject to additional costs with no commensurate increase in rent.
    AirBnB assisted S24 LL in being able to obtain more rent to pay for S24 taxes.
    Those LL have now been forced to return to the far less profitable long term lettings.

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