Just how much are buy to let rents across the UK and are they rising or falling is difficult to tell from statistics issued by two firms tracking the data.
LSL Property Services – the company running high street letting brands Reed Rains and Your Move – says the average buy to let rent in England and Wales is £768 a month.
However, statistics issued on the same day by home insurer Homelet puts the figure at £755, when the UK average is adjusted to exclude Scotland.
The difference is not stark – just £13 a month – but shows why independent buy to let rent trackers and property price rankings are unreliable.
Here are some of the points to watch:
- Sample – LSL relies on rent figures from properties handled by the firm’s letting agencies, while Homelet relies on reference checks carried out by landlords and letting agents.
- Both could have a geographic and marketing bias. For instance, their customers could come from a certain region, let cheaper or more expensive homes than other landlords or the firms could market into a certain landlord demographic.
- Sample size – The sample is limited by the number of customers each company has
- Price basis – Are both trackers based on the same pricing ie rents asked for or achieved?
Then landlords trying to work out what buy to let rent to ask for need to know how to apply the average rent for their region.
Take London – does the average rent include penthouse flats in Kensington as well as terraced homes in Dagenham? The penthouse could demand thousands of pounds in rent a week, while a terraced house in Dagenham generates a few hundred a month.
The only way to really find out how much rent a buy to let will command is to have a rental assessment from a surveyor who should find several local comparables, but many landlords will argue a surveyor’s buy to let rent ideas may differ widely from their own.
By the way, both firms agree rents are increasing generally in line with inflation – which was 1.8% last month and the rate of rent increases is slowing as the cost of living drops.