As our regular readers know, we usually concentrate our thoughts about trends in rent levels on East Anglia with particular emphasis on our local Norwich/Norfolk market. However, every now and again, it is useful to contrast and compare this with other regions in the UK so we're including a few additional Stats from the monthly Homelet Rental Index just published for January 2014.
Homelet headline their report with "Average rents decrease to lowest amount since May 2013"
The average cost of renting a home decreased by 1.7% during January 2014 to £800 per month – the lowest amount since May 2013
However, data from the January 2014 report shows that despite the monthly drop, tenants around the UK are still paying rents that are an average of 2.4% more expensive than the same time last year.
Other headlines from the January Index show:
- The average UK rental amount for the last three months (three months up to January 2014) is £806 per month – a 3.3% increase on the same period as last year
- When the Greater London figure is removed, the average cost of renting a home in the UK decreased by 2% during January to £670 per month
- It is currently 88.4% more expensive to rent a home in the capital than the rest of the UK (when the Greater London figure is removed)
- The East Midlands was home to a five consecutive monthly decreases in average rents. After lowering by 0.5%, it now costs an average of £570 per month to rent a home in this region – the lowest amount since May 2013
- It is currently 24% more expensive to rent a home in the North West than in the North East
Ok, so how are we doing in this part of the world by comparison? The average rent in January was £743 per month showing a monthly variance of -0.4% but still showing a positive annual variance from this time last year of +8.2%. Our own managed portfolio at the end of February is still averaging £710 pcm or 6% better than the national average (ex. London).
We had another excellent month in February with demand continuing to be strong for well maintained properties, particularly those priced at or below the average point. We appreciate this last sentence sounds typical, "agent-speak", when does an agent ever admit to the market being anything other than rosy? However, that's not our intention with this commentary, we will always tell it like it is! Indeed, we had pretty much convinced ourselves at the back end of last year that the lettings market in 2014 could be quite difficult compared to the bull run we experienced from 2008-2013 when the rest of the world was in economic crisis. Our forecasts were based on the premise that the general economy was on the Up and the Help to Buy Scheme would accelerate the recovery the housing market leading to the overall number of renters dropping off, thus, depressing rents. Most of this is still valid except demand just hasn't dropped off. This is great for Landlords especially when factoring in the capital growth/recovery being experienced also.
Anyone, looking to add to their portfolio or take the big step in becoming a first time Landlord ought to be seriously looking now just in case rising prices don't stabilise when more stock (hopefully) becomes available in the Spring.