Over the last eleven years Kate Faulkner has produced the Belvoir Index to give landlords an up-to-date and accurate picture of what’s actually happening to rents in their area, as opposed to just looking at ‘averages’.
The highlights from the latest report show that for all Belvoir offices consistently trading since 2008 (excluding Northern Ireland), the average rent is £756 per month for Q3 2019. This is an unusually high increase year on year of 4%, and yet, compared to the 2018 average for the year, rents have risen less, by 2.75%.
We believe this increase is attributable to three causes. Firstly,
landlords have clearly increased rents this year in response to agents’
increased charges following the tenant fee ban. In addition, government-imposed
tax rises are starting to bite. Finally, the costs of running a legal and safe
home to let are higher and landlords are aiming to recoup some of these
additional costs via higher rents.
Normally we only see rents rise when wages are growing at a higher rate than inflation. Hence, with the Consumer Price Index (CPI) rate at 1.5% and wages growing at 3.6%, current conditions are supporting the ability for tenants to pay more.
House rental inflation and stock shortages
Detailed feedback from individual Belvoir agents shows that:
- House rental inflation is higher than flats rental owing to lack of supply. In addition, people looking to rent a home are typically more affluent than those looking for a flat.
- Biggest stock shortages include three-bed semis/terraces, three-bed detached, two-bed houses, four-bed detached, and two-bed flats, although this differs somewhat by area.
Of course landlords are keen to avoid rent arrears and evictions. Belvoir represents a ‘safe pair of hands’, since there are few rent arrears across the network, besides which two-thirds of the offices returning my survey had recorded no evictions in Q3 2019.
How can the Belvoir Index help landlords?
The Belvoir Index offers invaluable rental information, not only for the UK on average, but also for each county and region and, most importantly, for individual offices. We not only assimilate and evaluate data from many of the offices around the UK, we also ask for individual feedback from offices in towns and cities in each county.
For example, in Scotland, we have individual rental data and market feedback from Dundee and Falkirk; in Wales the Wrexham, Swansea and Cardiff offices explain what’s happening locally and in England we cover rental markets for small and large areas such as Uxbridge, Kingston-upon-Thames, Basingstoke, Gloucester, Kings Lynn, Bedford, Newark, Telford, Stoke-on-Trent, Harrogate, Doncaster, Newcastle and Chester. However, these are just a few of the rental markets covered in the report.
What’s the forecast
for Q4 rent levels?
The majority of Belvoir agents are predicting rising rents for flats and houses, for the most part, while room rents are more like to remain fairly static, or with only some small increases.
If you are interested in receiving a detailed review of what’s happening to rents, trends in landlords’ buying and selling, period of time tenants are staying in a property, and eviction and void levels, then do sign up to receive my Belvoir Lettings Index as soon as it’s out!
Sign up link: https://belvoir.lpages.co/rental-indexlandlordzone/ Sources: https://www.ons.gov.uk/economy/inflationandpriceindices and https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours