New official data says tenants are paying the highest ever private rent as payments demanded by landlords rise at a record rate.
Buy-to-let rents were up three per cent in June, according to the Office for National Statistics – the most rapid monthly growth since records started in January 2015.
Since then, private rents have increased by 13.9 per cent.
Rents are rising at their fastest rate in the East Midlands, where tenants paid 4.3 per cent more than a year ago. The lowest rent growth is in London, where tenants expect 1.7 per cent more than last year.
Letting agents explain a lack of new homes to rent coming to market and high demand is pushing up rents.
- 1 Buy to let rents by region
- 2 Tenants paying more than £1,100 a month
- 3 How rents have changed where you are
- 4 Guild of Landlords Rent Digest – FAQ
Buy to let rents by region
The East Midlands has shown the most robust rent growth for the past three months with a 4.3 per cent rise.
Not far behind are the South West (4.1 per cent) and the East of England (4.0 per cent).
The lowest increases were in London – just 1.8 per cent – and the North East (2.8 per cent).
Tenants paying more than £1,100 a month
The average rent for a new tenancy in June tipped £1,100 a month, rent price monitor Homelet has stated.
The data is extracted from thousands of tenant reference checks each month.
Rents increased by 10.5 per cent in a year to £1,113 a month.
The North-East was the only place where rents dipped, with a 0.3 per cent drop. Landlords in London saw the fastest growing rents, hitting 14.9 per cent for the year.
Rob Wishart, Homelet’s head of business intelligence, said: “The impacts of inflation, the war in Ukraine, energy price and other cost increases are all combining to squeeze households. This month’s rental figures also show a rise, and it is relatively easy to surmise that all of the issues above will lead to an increased number of tenants unable to pay their rent, which is a bad thing for everyone.
“As we have mentioned many times, there is a shortage of housing stock in this country, and this is a phenomenon that is only getting worse as many landlords are deciding that they would prefer to leave the market altogether. “
How rents have changed where you are
|Region||June-22||June-21||Yearly change||May-22||Monthly change|
|Yorkshire & Humberside||£761||£701||8.60%||£757||0.50%|
|East of England||£1,071||£1,005||6.60%||£1,062||0.80%|
|The UK excluding London||£936||£861||8.70%||£928||0.90%|
Guild of Landlords Rent Digest – FAQ
For landlords confused by the stats and what they mean, here are answers to the most asked questions about rents.
Why do the rent indices show different results?
Check the data carefully. Other indices cover different periods, and the samples vary between reports.
The ONS has the most extensive sample, so the most reliable figures should return, but the time to collect and analyse the statistics often means the ONS data lags behind the rest of the sector.
ARLA derives insights from letting agents and provides what’s known in the trade as a sentiment survey rather than factual data.
Homelet statistics come from customer data, which may not fully reflect the market.
Should landlords raise rents in line with the stats?
That’s a business decision for landlords. The rent statistics indicate how the market moves but do not reflect demand from tenants and property standards in local neighbourhoods.
Don’t forget that the data is historical, showing what’s happened rather than what will happen.
Which rent index is the best?
That’s up to individual landlords. For instance, one index with a solid customer base in the same area as a landlord’s portfolio may align more closely with market rents for that neighbourhood.
Average data is not good if you don’t have an average home, and median rents will cover everything from a room in a shared house to a four-bedroom home.
Extra research with local letting agents is likely to indicate better where a landlord should pitch a competitive rent and stop them from underselling.
Although several letting agents and property organisations publish regular rent statistics, many have been affected by the coronavirus lockdown that has their reports suspended or delayed.