HomeLet Rental Index Feb 2016

HomeLet Rental Index Key headlines • When London is excluded, the average UK rental value was £744pcm - this is 4.8% higher than the same period last year (£710pcm) • Average rental values have increased in ten out of twelve regions in the UK, compared to the same period last year • The North West (-3.2%) has seen a continued reduction in rental values over the last 8 months • Average rents for new tenancies in London are 7.7% higher than the same period last year • Annually rents for new tenancies in Greater London are up by 7.7%, this rate of increase is lower than last year (10.3%)

February 2016 edition HomeLet Rental Index provides comprehensive and up to date data on new tenancies in the UK. As part of the referencing process for around 350,000 prospective tenants each year, HomeLet processes information including the rental amounts agreed, the number of tenants moving into the property together with the employment status, income and age of all tenants. The trends reported within the HomeLet Rental Index are brand new tenancies which were arranged in the most recent period, giving the most relevant insight into changes in the Private Rented Sector. All rental and income amounts are an average taken over the three months preceding February. The annual change is calculated as an average for the latest three months compared with the same period a year earlier.

Average rental values Annual variance in average rent for Greater London and the UK (excluding Greater London) Greater London

16%

UK excluding Greater London

Annual variance (%)

12%

8%

4%

0% Feb-14

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

Feb-15

Apr-15

Jun-15

Aug-15

Oct-15

Dec-15

Feb-16

Time (month)

It’s interesting to note… • The average UK rental value excluding London was £744pcm - this is 4.8% higher than last year (£710pcm) • Rents in Greater London are up by 7.7% against last year, which is a small increase on January 2016 (6.2%) and a reduction on February 2015 (10.3%) • The rest of the UK is up by 4.8% against last year, which is a small reduction on January 2016 (5.5%) and comparable to February 2015 (4.7%) • Outside London, the highest levels of annual increase have been seen in East Midlands (6.7%), South East (6.5%), East Anglia (4.4%) and South West (4.0%) • The North West (-3.2%) has seen a continued reduction in rental values over the last 8 months UK region

al breakdo wn

All rental amounts preceding are an averag the date e taken shown.

In detail...

over the

three month

s

Average rent d from previous ecreased year

Average rent i on previous yencreased ar

Scotland Average rent t o Feb 2016 Average rent t o Jan 2016 Monthly varia nce Average rent t o Feb 2015 Annual varian ce

1.0% £625

Yorkshire

3.9%

Average rent t o Feb 2016 Average rent t o Jan 2016 Monthly varia nce Average rent t o Feb 2015 Annual varian ce

£618 £626 -1.2% £613 0.8%

£636

East Midl

1.8%

ands


£657 -3.2%

West Midl

ands

£637 £646 -1.3% £598

£659

6.7%

£663

East Angl

-0.6%

ia

£642


2.6%

Wales Average rent t o Feb 2016 Average rent t o Jan 2016 Monthly varia nce Average rent t o Feb 2015 Annual varian ce

£596

£793 £784 1.2% £760 4.4%

£595

Greater

0.2% £576

£584 £582 0.4% £571 2.2%

Figures are rou

cimal place

London


3.4%

Irela

nded to one de

ber

£624


Northern

and Hum


North Wes

nd Average rent t o Feb 2016 Average rent t o Jan 2016 Monthly varia nce Average rent t o Feb 2015 Annual varian ce

UK exclu ding

London avera Average rent t ge o Feb 2016 Average rent t £744 o Jan 2016 Monthly varia £740 nce Average rent t 0.5% o Feb 2015 Annual varian £710 ce 4.8%

£519 £528 -1.7% £533 -2.6%

£649 £643

t

The full regional breakdown can be seen on page four

North East


South Wes

£1,521 £1,510 0.8% £1,413 7.7%

t


£865 £852 1.5% £832 4.0%

South East


£938 £933 0.5% £881 6.5%

Page four

Page one

Average rental values with annual comparison UK excluding Greater London 775 +4.8%

Average monthly rent (£)

750

725

+4.7%

700 +2.4% +1.4%

675

650 3 months to Feb 12

3 months to Feb 13

3 months to Feb 14

3 months to Feb 15

3 months to Feb 16

Greater London £1,600 +7.7%

£1,500

Average monthly rent (£)

+10.3%

£1,400

+4.1%

£1,300 +7.2%

£1,200

£1,100 3 months to Feb 12

3 months to Feb 13

3 months to Feb 14

3 months to Feb 15

3 months to Feb 16

The figures also show… • The annual growth in average rental values in the UK excluding London (4.8%) was higher than 2015 (4.7%) and 2014 (2.4%) • The annual growth in average rental values in Greater London (7.7%) was lower than 2015 (10.3%) Page two

Greater London v. the rest of the UK Monthly variation between Greater London rental prices and the UK average (excluding Greater London) 110%

Variation in average rental amounts (%)

100%

90%

80%

70% Feb-14

Apr-14

Jun-14

Aug-14

Oct-14

Dec-14

Feb-15

Apr-15

Jun-15

Aug-15

Oct-15

Dec-15

Feb-16

Time (month)

The figures also show… • In February 2016 average rental values in London (£1,521) were 104% higher than the rest of the UK (£744) • In February 2016 average rental values in London were 104% higher than the rest of the UK; this is an increase on February 2015 (99%) and February 2014 (89%) • In February 2014 average rental values in London (£1,281) were 89% higher than the rest of the UK (£678) • The variation between London and the rest of the UK has reduced since a peak in September 2015

Page three

UK regional breakdown All rental amounts are an average taken over the three months preceding the date shown. Average rent decreased from previous year

Average rent increased on previous year

North East

UK excluding London average

Average rent to Feb 2016

£519


£744

Average rent to Jan 2016

£528


£740

Monthly variance

-1.7%

Monthly variance

0.5%


£533


£710

Annual variance

-2.6%

Annual variance

4.8%

Scotland Average rent to Feb 2016

£649


£643

Yorkshire and Humber

Monthly variance

1.0%


£618


£625


£626

Annual variance

3.9%

Monthly variance

-1.2%


£613

Annual variance

0.8%

East Midlands

North West Average rent to Feb 2016

£636


£637


£624


£646

Monthly variance

1.8%

Monthly variance

-1.3%


£657


£598

Annual variance

-3.2%

Annual variance

6.7%

West Midlands

East Anglia


£659


£793


£663


£784

Monthly variance

-0.6%

Monthly variance

1.2%


£642


£760

Annual variance

2.6%

Annual variance

4.4%

Wales

Greater London


£596


£1,521


£595


£1,510

Monthly variance

0.2%

Monthly variance

0.8%


£576


£1,413

Annual variance

3.4%

Annual variance

7.7%

Northern Ireland

South West

South East


£584


£865


£938


£582


£852


£933

Monthly variance

0.4%

Monthly variance

1.5%

Monthly variance

0.5%


£571


£832


£881

Annual variance

2.2%

Annual variance

4.0%

Annual variance

6.5%

Figures are rounded to one decimal place

Page four

About the HomeLet Rental Index As well as information on rental amounts, the HomeLet Rental Index also provides information on tenant demographics, such as their average age, income, previous residential status and the property type they’re applying to live in. Data is gathered from our tenant referencing service, and our rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs. We reference up to 1,700 applicants every day – so information in the report is comprehensive, accurate and up to date. The data used in the HomeLet Rental Index is aggregated to local authority, county, city and regional level only. This ensures that all property or individual records remain strictly anonymous. HomeLet Rental Index is prepared from information that we consider is collated with careful attention, but we do not make any statement as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report.

About HomeLet With more than 20 years in the industry, HomeLet is one of the leading sources of support for the UK’s vibrant private rented sector. Part of the Barbon Insurance Group, we’re based in Lincoln, with more than 300 members of staff working hard every day to support letting agents, landlords and tenants.

Visit:

homelet.co.uk/homelet-rental-index

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HL4320 03/16

For information regarding the HomeLet Rental Index please email [email protected]