Tenant demand for buy to let housing is running at the highest level landlords have seen for five years. This is the Guild rent digest for February 2021.
A third of private landlords say they are dealing with increasing numbers of inquiries, according to a survey from specialist landlord lender Paragon Bank.
The research also showed growing tenant demand varies across the regions.
Although 58% of landlords in the South West reported more inquiries from renters, only 10% in Central London could report the same.
Landlords also confirmed inquiries were up in the West Midlands (48%), Wales (42%) and the South East (42%).
Meanwhile, separate data from the Association of Residential Letting Agents (ARLA) was at odds with the Paragon Bank research.
ARLA’s Private Rented Sector Report, December 2020 says tenant demand dropped, but was contradicted by a report from the Royal Institution of Chartered Surveyors (RICS), that suggest tenant demand rose modestly in Q4 2019.
- 1 Rent rises nudge down after two years
- 2 Rent increases by country – January 2012 to January 2020
- 3 Rents by region in England
- 4 Average tenant pays £979 a month rent
- 5 Guild of Landlords Rent Digest – FAQ
Rent rises nudge down after two years
Annual rent increases that had hovered between 1.4% and 1.5% since November 2019 nudged down to 1.3% in January, according to the Office for National Statistics (ONS).
By country, Wales saw the highest year-on-year rent growth – up 1.6%, while in England the figure was 1.3% and in Scotland, rents rose just 1%.
“Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period,” says the latest ONS Index of Private Housing Rental Prices.
“Rental growth started to pick up at the end of 2018, driven by strengthening growth in London. Rental growth has remained broadly flat since November 2019.”
Excluding London, the ONS reports rents in England increased 1.5% – down from 1.6% at the end of last year.
London rents were up 0.8% in January, again down on December’s 0.9%.
The ONS also revealed that private rents had increased by 10% since the January 2015.
Rent increases by country – January 2012 to January 2020
Rents by region in England
The South West and East Midlands had the largest rent increases in England for January – both reporting a 2.2% rise.
The West Midlands was next with 1.8% growth.
London (0.8%) and the South East (1%) were the largest losers.
Rent increase in England – year to January 2021
Check median rents for your local authority for different property types with this interactive map.
Average tenant pays £979 a month rent
Average rents for new tenancies in January were £979 a month, a year-on-year increase of 2.7%, according to tenant referencing agency Homelet.
Excluding London, the average rent across the rest of the UK is £839 a month –5.8% more than a year ago.
London rents are down 3.9%. This is the eighth month in a row London rents have dropped, although the rate of decline slowed from 4.4% in December.
Average rents in London are £1,563 a month.
“The data continues to show that demand remains exceptionally high in many areas. The needs of tenants have shifted throughout the pandemic, creating upward pressure on locations that offer more space, both inside and outside the property,” says Homelet CEO Andy Halstead.
He also warned landlords should be vigilant as fraud and other suspicious activity has increased during the COVID-19 pandemic.
“The industry is working more remotely, and things like online viewings will continue to play an essential part in the tenancy process. This remoteness could be contributing to the increase we’ve seen in fraudulent and suspicious activity; it just highlights how critical high-quality checks are to the lettings process,” he said.
Homelet – rents by region for January 2021
|Region||Jan-21||Jan-20||Annual change||Dec-20||Monthly change|
|East Of England||£979||£907||7.90%||£983||-0.40%|
|Yorkshire & Humberside||£680||£651||4.50%||£682||-0.30%|
|UK outside Greater London||£839||£793||5.80%||£838||0.10%|
Guild of Landlords Rent Digest – FAQ
For landlords confused by the stats and what they mean, here are some answers to the most asked questions about rents.
Why do the rent indices show different results?
Check the data carefully. Different indices cover different periods, and the samples vary between reports.
The ONS has the biggest sample, so should return the most reliable figures, but the time taken to collect and analyse the statistics often means the ONS data lags 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 solid data.
Homelet statistics are based on 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 are an indication of how the market is moving but do not reflect demand from tenants and property standards in local neighbourhoods.
Don’t forget the data is historical, so gives a picture of what’s happened rather than what will happen.
Which rent index is the best?
That’s up to individual landlords. One index with a strong customer base in the same area as a landlord’s portfolio may align more closely with market rents for that neighbourhood, for instance.
Average data is not much 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 give a better view of 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.