Rents on new UK tenancies rose on average by 4.9% outside of the capital last year, with Brighton, Bristol, Edinburgh and Newcastle experiencing the highest rental increases in 2015, a new index has revealed.
The HomeLet Rental Index has found that the average rent in the UK at the end of 2015 was £739 outside of London, compared to £704 in 2014. In London rents averaged £1,523 at the end of 2015, against £1,410 in 2014.
Brighton and Bristol’s rental market saw the steepest increases with rents on new tenancies signed last year rising on average by 18% compared to 2014. Edinburgh and Newcastle followed closely behind seeing a 16% increase.
London continued to be a top rental hotspot in 2015, along with Liverpool, both experiencing increases of 11%.
The monthly HomeLet Rental Index shows an average 4.9% rise on new tenancies signed across the UK (excluding Greater London) in the last three months of 2015, when compared to the same period in 2014.
The monthly figures also show that the London market was up by 8% on the final three months of 2014, hitting an average rental figure of £1,523.
Martin Totty, Chief Executive Officer, Barbon Insurance Group, said:
“2015 was a year in which rents on new tenancies were up on 2014 in almost every area of the country.
While we saw a moderation in the rate at which rents increased during the final months of the year, and even some falls in a number of regions, the sector overall has continued to see strong demand.”
“Beneath the headline figures, HomeLet’s data points to some significant variations in rental market performance in 2014, both from region to region and from town to town.
In locations such as Brighton and Bristol, demand for rental property appears to have been particularly strong and rents on new tenancies jumped very markedly.
In other areas, we saw slower growth.”
The Index from the specialist lettings insurance company, HomeLet, which is part of Barbon Insurance Group, also reveals that rents on new tenancies agreed over the three month to December 2015 fell in eight out of 12 regions in the UK, when measured against the three months to the end of November.
The biggest increases were seen in the West Midlands and Wales (up by 1.0% and 0.8% respectively), while Scotland and Northern Ireland saw the biggest falls, at 2.8% and 1.8% respectively.
However, rents rose on an annual basis, in 10 out of 12 areas, led by London where rents on new tenancies signed during the final three months of the year were 8% higher than in the same period in 2014.
This trend was continued in the South East, where rents were 7% higher.
The North-West of England and Northern Ireland were the exceptions, witnessing decreases of 5.1% and 0.6% respectively.
Martin Totty added:
“Rents in London have continued to rise more quickly than in most areas of the country, but not at quite the pace of 2014; meanwhile, average rents outside of the capital rose more quickly last year than in 2014.
As a result, we saw a narrowing of the rent inflation gap between London and the regions last year - is this a trend we will see continuing in 2016 from tenants seeking value for money in the private rented sector?”