Belvoir’s Q2 rental index confirms nominal rental rises in many areas of the country, but 12 counties across the UK have yet to recover to the highs of 2008 and offices across the country are reporting that lack of supply is putting increased pressure on the rental market.
“The Belvoir quarterly rental index, which is prepared by property analyst Kate Faulkner, has picked up rises in rents in most places across the country since Q4 2014, but contrary to media reports these are far from extortionate, or spiralling out of control,” says Dorian Gonsalves, Belvoir’s Director of Commercial and Franchising.
“Belvoir’s trends are very much inline with the Office of National Statistics (ONS) private rental index. In November 2014, the ONS reported that growth in average pay for UK workers overtook inflation for the first time in five years. Therefore any rental increases that have been seen since late 2014 need to be put into context, as rents have hardly increased across most regions since our index started in 2008.
“Belvoir’s data shows that in 12 counties where Belvoir has been trading for the last seven years, Q2 2015 average rents have still to recover to the highs of 2008. These include Cheshire, Dorset and Northamptonshire. In contrast, inflation has risen by 19.17%.
“The number of Belvoir counties that exceeded the 2008 rental highs during Q2 2015 was 19, and these include Bedfordshire, Worcestershire and Wiltshire.
“Unsurprisingly, the highest increase over this time was in London where rents have increased by 22% since 2008, in line with inflation. However, in the East Midlands, rents are still 2.5% lower than they were in 2008.
“Belvoir has 190 offices and franchise owners have reported varying trends across the country. For example, in Dundee most average monthly rents were static or even 2% down on average across the area and properties in Q2, but there was an increase in Buy to Let (BTL) enquiries.
“Over in Cardiff rentals for the summer months were busier than ever, and from a tenant perspective apartments are the most popular, but there is a real shortage of good quality three and four bedroom houses.
“In Wrexham there is evidence that proposed mortgage tax relief changes have spooked some landlords, who are now looking to sell, which is reducing supply. In Northern Ireland rental supply is already very low with properties renting quickly and numerous perspective tenants competing for each rental, and rents there are increasing.
“Over in Uxbridge property prices are rising faster in outer London and into the Thames Valley corridor than other areas. Sited in west Greater London, Hillingdon is currently the fastest rising borough in London. The current rate of increase in property prices is 14.6% in Hillingdon Borough, compared to 8.3% across London and 4.6% across England and Wales.
“There is also evidence that in some parts of the country, such as Peterborough, an increase in modern, well-presented accommodation has increased demand for city centre living. The situation is similar in Nottingham, where a significant increase in the level of interior condition of rental properties has been noted. This has led to longer tenancy terms, up from an average of nine months to 15 months, with an increase in yields driven by shorter voids, a faster turnaround and less refurbishment required to re-let.”
