Rents have risen in three-quarters of UK regions, with the average rent for a new tenancy now standing at £918 a month. Rents rose by 1.5% in April, compared to the same time in 2017, according to figures from the HomeLetRental index. If London is excluded, the average monthly rent is £761, which is a rise of 0.9% compared to the previous year.
Taken over 12 months, rents were put up in 9 out of the 12 regions monitored in the index. The biggest increases were in London, with a 4.5% rise year-on-year putting the average rent at £1,588 a month. Rents in Scotland rose by 3.3%, with strong gains also in the West Midlands at 2.7%, East Midlands at 2.5% and Northern Ireland at 2.3%. Elsewhere, rents grew in the North West by 2.2%, Yorkshire & Humberside by 1%, South West by 0.7% and East of England by 0.3%. However, three regions also saw rents decrease, namely Wales by -2.1% and the North East and South East of England by -0.4%.
These rental rises could be due to several factors, including the general increase in costs, increased expenses and tax changes to landlords which are passed on to tenants, and demand continuing to outstrip supply. Property specialists at Abacus Solicitors have looked at how the buy-to-let sector has changed in recent years and how it expects it to change in the future. For instance, in 2014 there were two million landlords and 4.9 million rental properties. In 2017, 36% of buy-to-let properties were flats, 34% were terraced houses and 30% were all other types of properties. For next year, it is predicted that there will be 5.9 million buy-to-let properties and by 2023, the average rent in the UK will be £1,000. It is also forecast that by 2032, 35.2% of properties in the UK will be rentals.
This increase in demand and rental charges shows that buy-to-lets are still a sound investment for professional landlords. Abacus Solicitors suggests good areas to look for investments are in the north where rental yields are significantly outperforming the rest of the UK. Manchester and Newcastle are pinpointed as attractive options. Alternatively, the London commuter belts are also singled out as good choices. Districts like Slough have rental yields of about 5.9%, while towns on the new Elizabeth rail line from Reading to the west of London and on to Abbey Wood in the east could see property values soar by up to 43%.
Ensure you are being transparent and fair – start using a property inspection app today to produce professional inventories, check-ins, check outs, interim inspections, building inspections, risk assessments and more with InventoryBase.
Start your free trial here today