With the UK economy growing at the fastest rate of all developed economies it is perhaps not surprising that rents are beginning to reflect this, though wages increases are still lagging behind inflation, which recent figures show is just below the Bank of England’s target of 2.0%, at 1.9%
According to the HomeLet Rental Index the average rent of a UK private home rose by 8.3% year to date July 2014. So the average rent in the UK is now £900 per month from £825 one year ago.
Averages can be deceiving; so whereas some locations such as in London have exceeded these figures comfortably, in other areas rent rises are below inflation year to date. Regions where economic development and wage growth has been particularly slow are showing the least movement in rent levels.
However, more recent figures for July 2014 are showing sharp increases, with the private rental market in Scotland on average rising 10%, which compares to a 4.4% average across the whole of the UK. Whilst London has been leading the field until now, more recent data for
July shows that other regions are beginning to catch up.
Whereas the Scottish market has been relatively flat over the year, and falling during some months, the sudden 10% rise in July brings the annualised figure positive at 1.4% higher year to date.
The index shows other UK regions have achieved strong rental growth over July, with East Anglia (9.4%) and the South West of England (8.1%) and Greater London (9.4%).
Reporting in her regular proeprtychecklists market review, property market analyst Kate Faulkner says that tenants who can stay for long periods in their rental properties are more likely to be able to keep their rental increases low. Moving often means that they are likely to pay a higher rent each time they move and sign for a new tenancy.