Whether you’re considering investing in a buy-to-let property, or you’re an experienced letting agent looking for market insights, you’re in the right place. Here, we explore some interesting data from the latest Rental Index by HomeLet that will give you an insight into current rental values across the country.
What is the Rental Index?
It is a useful tool for anyone renting a property in the UK, as it includes a huge amount of valuable information like average rental values for different regions, household rent to income ratio, and annual variance in rental amounts. HomeLet, a leading referencing firm and support service for landlords, letting agents, and tenants, have released their Rental Index for 2020. Using data of actual achieved rental costs from their tenant referencing service, and incorporating important factors like location and property type, HomeLet can effectively track the changes in rental values over time across the country.
What Does it show?
The Rental Index 2020 shows that the average rent in the UK has increased by 2.9% year on year (YOY). It is now £974 on average, with rent in London being the highest of anywhere in the country currently sitting at £1,576. The lowest average rent in the country as of November 2020 is currently the North East, which is £536 – a decrease of 0.7% compared with the same time the previous year.
Which Areas Have Seen the Largest Increase in Rental Values?
In terms of rental values, the data shows that the South West has seen the biggest increase this year. Rent has increased by 8.6% to £910, compared with £838 in November 2019. In second place is the East Midlands which has saw a 7.3% increase YOY with an average rental value of £689, followed by Wales which had a 6.8% rise in rental amounts.
Which Areas Have Seen the Biggest Decrease in Rental Values?
Interestingly, Greater London has experienced the biggest dip in rental values of any region in the country. The Rent amounts have dropped by a significant 4.4% from Q4 2019 to Q4 2020, with the average rent currently sitting at £1,576. The borough of Westminster has seen the biggest decrease in rental values at -16.1%, dropping from £2,637 to £2,213. This is followed by Camden at -10.8% and Hammersmith, Fulham, Kensington, and Chelsea at -8.6%.
Why is it Beneficial for Landlords to Read the Rental Index?
The Rental Index gives a good idea of the market currently and may help landlords and letting agents predict where it’s likely to head in the future. It also may help those looking to invest in property to choose areas where the average rent is stable or increasing – as well as areas that may provide a good return on investment in the future. It will be a good tool for anyone who wishes to enter the rental business.
With the ongoing uncertainty of the coronavirus pandemic, the impact of Brexit on the nation, and many other economic factors coming into play, it’ll be interesting to see how the rental market fairs in the upcoming months or even in the coming years.