Landlords with larger family homes enjoying bigger rent increases

Landlords with family properties are in the pound seats when it comes to rent increases, according to data from lettings agency Hamptons.

It says the desire for more living space, a key feature of the pandemic, has driven up rents on larger properties faster than on smaller homes.  

In October, four-bedroom properties recorded the strongest rental growth.  The average rent on a four-bed home across Britain rose to £1,949 pcm, up 10.6 per cent on the same time last year and nearly triple the rate of growth of a one-bed which rose 3.7 per cent year-on-year to stand at £875 pcm.

Strong rental growth has meant that the average one-bed in Britain now costs the same amount as a two-bed did in 2016. This shows that the cost of trading up from a one-bed to a two-bed rental property has doubled over the last three years, says Hamptons.

Last month it cost £144 or 16 per cent more to rent a two-bed home, more than double the gap (£68 or eight per cent) in October 2018.  This equates to an extra £1,728 each year.

The cost of moving from a two-bed to a three-bed has also risen.  Last month a tenant would have had to pay an extra £142 or 14 per cent each month to trade up from a two to three-bed home, £30 more than in October 2020.  This will cost the average tenant an extra £1,705 each year.  

The average two-bed home now costs the same amount to rent each month as a three-bed did in 2018.  

Unsurprisingly London is the costliest region in the country to trade up, both in absolute and percentage terms.  Last month the average two-bed in the capital cost £567 or 42 per cent more each month than a one-bed.  At the other end of the scale, the North East is the cheapest region to swap a one-bed for a two-bed (£102 or 20 per cent).

The cost of trading up has risen the most in the East Midlands.  Here it cost 12 per cent or £63 more each month to trade a one-bed for a two-bed home than in October 2020. This is because rents on one-bed properties in the region have fallen by 0.2 per cent year-on-year, while two-bed rents have risen by 9.7 per cent. 

London is the only region where it’s cheaper to trade up than it was last year. This is because rents on one-bed properties in the capital have risen faster than two-beds. Much of the demand for one-bed homes in London has been driven by younger tenants and pied-à-terre hunters returning to the capital, which in turn has bolstered rents.

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