Whilst annually rents in London are currently 3.8% down annually they are showing a rapid increase. However, rents outside London are soaring at their fastest rate in more than a decade, according to a leading property portal with private rental prices increasing by 5% in the 12 months leading up to the end of July adding £456 to the average annual rental payments for tenants. This increase is the largest recorded since Zoopla began recording such data in 2008.
As is the case nationwide for both the sales and rental market the figures are a result of demand significantly exceeding the supply of suitable property.
The average monthly rental nationally stands at £943pcm and with the capital taken out of the equation, the regional view is £790pcm (up from £752 in July 2020). The North East has seen rental growth of 6.5% and Yorkshire of 4.9%.
Looking into the issue further it is clear that as restrictions, imposed due to the ongoing pandemic, have been relaxed or removed completely that the business sector is beginning its return to normality and more and more people are gaining the confidence and need to return to urban areas. Newcastle upon Tyne showed an increase in rent of 6.4% with the average rent now standing at £620pcm.
Competition for properties across the market is extremely strong, Lorna White, Head of Residential Lettings at George F. White, commented “For several months we have been receiving a much higher level of enquiries from prospective tenants looking for properties that may be coming to market soon and as such the vast majority of our available stock being let within days of it being available”.
In the year to date, rental demand is up 19% compared to 2020 whereas the total rental stock has fallen 13%.
Why are the North East and Yorkshire regions seeing strong growth? Affordability, whilst rents are indeed increasing so are incomes. In the North East, the average individual will shell out only 22.5% of their available income on rent, and Yorkshire 25.1%, compared to many other regions tipping 30% or more and the capital an eye-watering 44%.
It is widely expected that the property market will steady slowly across the remainder of 2021, assuming the path out of the pandemic continues, and overall, the year will be a strong one for those in the position of letting or selling property.
Lorna continued “Average property rentals have increased over the last twelve months and I think we will see that trend continue throughout 2021 with some seasonal peaks and troughs to be expected”.
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