The team at Experience Invest are experts in UK residential investments. This week we consider the latest Buy-to-Let Index from estate agents Your Move and Reeds Rains, part of the LSL Property Services group.
The Your Move and Reed Rains Buy-to-Let Index, which is based on analysis of 20,000 properties across England and Wales, reveals the cost of renting a home rose by 1.6% during August and September, taking the average monthly rent to a record high of £816 per month.
Rents on the rise
Rental costs have risen steadily in prime locations across the UK for a number of years. Statistics show that rents are now almost 25% higher than they were at the start of this decade. With consumer price index inflation at just above 14% during this period, the figure is closer to 10% in real terms – a still significant number.
According to a news article on the BBC website, property values ‘rose by between 3.85 and 8.6% over the same period in the UK’.
The research, which was released this week, highlights the areas particularly hit by rental increases in the last year as London, South East, South West, and East and West Midlands.
Rents in London have seen the sharpest increase – rising by 11.6% in the last year. Tenants in the capital can expect to pay an average of £1,301 per month.
While rents in the South East and South West have not risen as steeply, average monthly rents have still increased over the last year – reaching a new high of £831 and £691 per month respectively.
In the East Midlands rents now stand at £603 per month – up 6.7% from a year ago; and £592 per month in the West Midlands up 8.8%.
“Rents have been growing faster than ever, particularly in real terms given inflation has essentially been zero since February. Across the country, towns and cities are seeing demand from local tenants outstrip the supply of properties to let, with inevitable effects on rents.” Says Adrian Gill, director at Reeds Rains and Your Move.
“Rents are rising strongly in real terms due to the recent acceleration in wages, and the much deeper and longer term shortage of available properties across the UK of all tenures.” Gill added.
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