Rents have increased to their highest level on record, according to the latest price index from the Office of National Statistics (ONS).
Private rental prices paid by tenants rose by 1.4% in the 12 months to November 2020 to hit an average of £725 a month, the data shows.
Unsurprisingly, London is once again home to the highest rental rates at an average of £1,435 a month — almost double the rate for the rest of England.
The monthly rate for inner London was £1,690, while in outer London it was £1,300.
In contrast, the North East recorded the lowest monthly rate at £495.
David Alexander, the joint chief executive officer of apropos by DJ Alexander, commented: “This data shows that, despite this being an extremely difficult year, rents within the private rented sector remain buoyant.”
But he pointed out that it is important to recognise that within these figures lie enormous regional and country variations with England increasing by 1.4%; Wales by 1.6%; and an increase of just 0.6% in Scotland.
Scotland’s rental growth has consistently been below that of the rest of the countries of the UK since August 2016. Indeed, the figure for November 2020 is below that of the lowest English region which is the South East which saw annual growth of 0.9% whilst the highest performing area is the South West at 2.3%.
Alexander continued: “The private rented sector is the second largest provider of homes in the UK yet is often treated as an outcast by politicians when discussions on how to provide sufficient housing for the future. Given these modest rental increases it is clear that landlords and investors may be making a living, but they are not earning a fortune.”
He added: “I would urge governments, regulators and legislators to engage closely with the PRS to ensure that it continues to be supported in providing millions of homes for people across the country. The PRS is an essential part of the housing mix in the UK and needs support now and in the future. Landlords, property investors, and individuals must be helped to get through the pandemic and out the other side if we are to have a stable, viable and healthy housing sector in the future.”
The traditionally quieter winter months for the lettings market could this year “be silent enough to hear a pin drop”, according to Franz Doerr, CEO at rental payments platform flatfair.
Doerr added: “Cooling demand means landlords, particularly those in more central areas, could struggle to quickly fill voids if tenants hand in their notices over the coming weeks.”
Original Article from Property Industry Eye 17/12/2020