UK rents up two per cent as tenant demand continues to outstrip supply

British landlords take home an average £836 in rent per calendar month as housing supply fails to meet tenant demand

The figures come from a new report released by lettings agency Countrywide and show a year on year rental increase of two per cent with particularly high demand for quality homes among the rental market.

Average rental rates have grown throughout all property sizes, with one and two bedroom properties experiencing the biggest rise in rental rates; up 8.5 per cent and 3.6 per cent respectively.

The average price for a one bedroom home now stands at £751 per month with two bedroom lettings setting tenants back £810.

Three bedroom homes also saw some growth, now averaging £930 a month which is 1.6 per cent higher than last year, but four bedroom properties saw a slight dip, charging three per cent less at £1,345.

In terms of regions, the area with the most significant increase on an annual basis was Greater London which saw a rise of 10.6 per cent. This is followed by Wales with increases of 6.1 per cent and the South West where rents were up by 4.1 per cent.

Average rents for newly-let properties was up by 2.8 per cent to £883 and within this category it was one and two bedroom homes that had the biggest growth within the twelve month period.

Elsewhere, renewed tenancies are now at an average of £835 a month with this type of letting seeing an increase across most regions of the UK.

Scotland’s renewed tenancy prices were up by five per cent year on year while in Greater London they were 4.7 per cent higher and three per cent more in the Midlands.

Demand for more landlords

Countrywide’s Group Commercial Director Nick Dunning commented on the data, explaining the attraction of renting above buying:

“Renting is a flexible and relatively hassle free way of living which suits many people's lifestyles,” he said.

“It allows them to settle in a location where perhaps they couldn’t afford to buy but they enjoy living in.”

As the population of lifetime renters grows, there must be an increase in the amount of quality, affordable rental accommodation to meet the demand Dunning added.

For more information on rental increases please see a recent article from Steve Olejnik.