Letting surveys fail to agree on rental prices

Letting surveys fail to agree on rental prices

House price indices are confusing enough, with an £80,000 gap between what the Office for National Statistics says and what the Land Registry reports.

Lettings indices also come up with very different figures.

National average rents rose 4% in August and 11% year-on-year to stand at £779 in August – according to Sequence, part of Connells.

However, according to tenancy referencing firm HomeLet, the national average rent eclipses Sequence’s figure and is £851 a month – quite a difference.

Meanwhile, LSL has reported average rents in England and Wales of £743 – less than either of the figures given by Sequence and HomeLet

In London, Sequence says rents rose to £1,465, a 2% monthly growth, and up 8% on the year. HomeLet disagrees, saying rents in London are now an average of £1,316. LSL comes up with a figure of £1,126.

However, all three indices do have something in common – all say that rents are at, or near, record levels.

Sequence says that newly agreed tenancies in August were also up, 8% on the month and 17% annually. New tenant registrations nudged up 2% nationally, and 5% in London.

Sequence is predicting further rent rises on the back of strong demand and static supply.

Head of lettings Stephen Nation said: “The supply of new properties to the market has seen no change, and if this continues to be outstripped by demand then we will see further significant rises in rents.
“The London picture is very similar, with the number of people looking to rent increasing by 5% on month, but the number of new properties available decreasing by 1%. As a result of this competition, rents in London grew by 2% on month and activity levels in the capital have been phenomenal, with new tenancies agreed rising by 12% both monthly and annually.
“Buy-to-let mortgage applications are up 31% annually, the highest increase for over two years. This is in line with the Bank of England’s announcement that banks have lent a record £5bn in Q2 this year, which indicates that buy-to-let has not relinquished its status as the investment of choice for those looking to bolster their savings returns.”

According to HomeLet, if you take London out of the equation, the average UK rent is £709 a month, only slightly higher (1.4%) than in August last year.