Rents increase as new property cycle begins
Rents are continuing to rise across the private rented sector by an average of four per cent for house and two per cent for flats as recorded in the three months up to the end of February. These figures were considerably boosted by a nine per cent rise in rent in prime Central London and fiver per cent away from the South-east, reports ARLA in their latest quarterly survey.
Surprisingly, in the Southeast, rent fell by two per cent for house and five per cent for flats. According to ARLA, this could be the start of a new housing cycle.
The improvement in rents received includes an increase of well over £3,000 a year for renting a house and £1,500 for renting a flat in prime Central London. Rents have risen in the rest of the country too, from an average of £930 to £981 for houses and £619 to £664 for flats. In the South-eats the average rent has dropped from £1,390 to £1,361 a month for houses and from £930 to £82 for flats. In all the regions the cost of renting a house against renting a flat is around half as much again, between 48 per cent and 61 per cent.
ARLA Head of Operations Ian Potter pointed out that this quarter’s report emphasises the traditional cycle of the housing market.
‘We are seeing the beginning of the inevitable’ he said ‘When ever property prices soften or fall, rental demand, rents and yields all increase. As we begin a year of uncertainty in the sales market, it is inevitable that our member letting agents should report that they have more tenants than properties available for them’.
For the last three months the proportion of ARLA members saying that they have more tenants than properties is at its third highest level since quarterly ARLA surveys began nearly six years ago.
April 2008
