Data from the August 2019 HomeLet Rental Index shows that rent prices have reached an all-time high across the UK. According to the report
- The average rent in the UK has reached £970, which is up by 2.4% on the same time last year
- When London is excluded, the average rent in the UK is now £802, an increase of 2% on last year
- Average rents in London specifically are now at £1,689, up by 3.5% on last year
- All 12 of the regions monitored by HomeLet showed an increase in rental values between August 2018 and August 2019
It can be said that many people are choosing to rent rather than purchase homes due to the perceived uncertainty brought on by Brexit.
Buying a property is a major decision, and potential home buyers may be choosing to rent until they can be more certain about the future post-Brexit.
Despite this common concern, the pre-Brexit period can be a promising time for homebuyers to take advantage of, due to the availability of land, a number of lenders willing to offer mortgages, and low-interest rates.
The increased preference for renting over buying is, of course, positive news for private landlords, since more people are looking for somewhere to rent and most likely have higher budgets.
Thanks to strong demand for UK rental stock, continued wage growth and a near all-time high level of employment, landlords are regaining some pricing power and are now beginning to exercise it.
The HomeLet Rental Index report also analysed how much young people are spending on their rent.
It shows that the average 21 to 29-year-old spends over a third, (around 34%) of their pre-tax income on rent. This year a single room within a shared home costs on average £566 per month, up 1.2% from £559 in 2018.
Although it is a common opinion amongst young renters that rent prices continue to rise, the data shows that stronger income growth has meant tenants in their 20’s are spending less of their earnings on rent than previous years.
In 2017 tenants in their 20’s spent 39% of their pre-tax income on rent, but this has fallen to 34% as affordability has improved.
Surprisingly, Brighton comes before London as the least affordable place to rent a room.
The average cost at £647 per month which on average accounts for 35% of a 20 something tenant’s pre-tax income.
This could be down to the large student population placing pressure on rental accommodation.
London comes second, with rent prices accounting for 34% of a 21 to 29-year-old’s income, followed by Glasgow at 33%.
Sheffield is the most affordable city with rent accounting for 25% of a tenant’s income.
Overall, things appear prosperous within the property market, as we see rent prices increase in line with income growth, and lucrative opportunities exist for private landlords across the UK.
Hunter Finance can use their expertise in the property field, call on a number of resources and ensure you don’t waste time on lenders who are unlikely to back you. We may be able to offer you a good deal on your finance and there are no brokers fees as we lend our own money.