The UK rental market seems to be becoming increasingly buoyant, with average rental figures rising year after year.
Indeed, an annual review by HomeLet Rental Index has found that rents have risen by 6.6% over the past year, being a bonus for landlords but hitting tenants hard in the pocket.
The average rented home now costs £867 a month, according to the data. The areas seeing the biggest price rises include Leicester (45%), Southall (38%) and Cambridge (24%).
Chief executive of Barbon Insurance Group, Martin Totty, said: ‘The demand for rental property is increasing, and we expect it to continue doing so in 2015 as large numbers of people are priced out of buying. As a result, we expect to see continued growth in rental prices across the UK as the new year progresses’.
Meanwhile, the figures for UK tenants in rental arrears have risen for the first time since 2012. Reports by LSL Property Services suggest that over 68,000 UK tenants were severely behind with their rental payments in the last quarter of 2014—a year-on-year rise of 7.2%.
However, the same report has shown that eviction rates have improved, with 6% fewer tenants being asked to leave their rental accommodation in 2014 than during the previous year—the biggest fall since 2010. The data suggests that eventually, tenants are getting back on track with their payments.
As government statistics show that wages are beginning to rise in real terms, the prognosis for tenants is not as grim, then, as it might initially seem.
In fact, north of the Scottish border, rent rises have slowed down considerably, with average rents rising only 1.2%, or £6, over the past year.
Either way, the prospects are good for property investors, with average UK rents continuing to increase for what looks like the foreseeable future.
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