The latest Move with Us rental index, for Q4 2013, shows that rents have dropped for tenants in the most expensive regions of the UK but are going up in traditionally cheaper areas.
The survey found that Great Britain saw a role reversal in Q4 2013 with significant increases in average asking rents in regions that typically experience slower growth rates. For example, the North East saw an average rise for the quarter of £58 (9.16%), Wales £59 (9.62%) and Yorkshire and Humber £36 (6.38%).
Meanwhile, prospective tenants in the strongest performing regions, Greater London and the South East, saw rents fall by an average of £12 and £24 respectively in Q4, closing the gap in rental prices between the North and the South. The decrease recorded in the last quarter of 2013 in these regions, however, comes following strong growth in the first half of last year.
The UK rental market ended 2013 strongly with the average asking rent peaking at £986 per month in November.
Increasing rental prices have raised the question over whether the average asking rent for tenants in Great Britain could surpass £1,000 per calendar month in 2014.
Robin King, director of Move with Us, said: “Recent data from the Office for National Statistics (ONS) show how the number of adults between the ages of 20 and 34 living with their parents has increased by a quarter in the last 18 years. Rising asking rents have been a big contributing factor to this rise making it harder for first time buyers to rent while at the same time being able to save the deposit to buy their own home.
“Overall average rents are rising in the UK, and coupled with the lack of supply for prospective buyers in the sales market, means more people are renting. Landlords have responded to the change in the market by raising the standard of rental properties and lengthening contract terms to provide tenants with security and better living conditions so renting is a viable alternative to buying.
“The drop in average rents in Greater London and the South East is seasonally typical as demand for rental properties decreases in the run up to Christmas. We expect that this will correct itself in the first quarter of 2014 as we are already seeing an influx of tenants looking to move at the start of the New Year.
“Average asking rents in the usually slower performing regions such as Wales and the North East went against the seasonal trend in the last quarter of 2013 and increased, closing the gap between the cheapest and most expensive places for tenants to rent in the country. This is likely to have been caused by the lack of supply in the sales market in the North of England which pushed rental prices up by almost 10% in areas such as Wales and the North East.”