Here is Property Options’ latest update on the UK Buy To Let (BTL) market – for June 2018.
This update is by economist Chris Worthington, who is one of our regular PIM speakers.
This month we decided to look at the subject of rents in more detail.
First the average annual increase or decrease in rents in the UK as reported for the first quarter of 2018 from various sources:
- The Office for National Statistics (ONS) reported an increase in average rents of 1%
- The Rent Index published by the Deposit Protection Service (DPS) reported a fall in the average rent of 0.54%
- The Rental Index published by peer to peer lending company Landbay recorded a fall in average rent of 0.64% in England if London is included and an increase of 1.19% if London is excluded. Rents in London fell 0.27%
- Insurance company Homelet recorded a rise in rents of 0.9%
Our conclusion from the above statistics is that average rents in the UK in the past year have been fairly static.
However there are wide regional variations:
- The ONS found that rents increased by 1% in England, 1.3% in Wales and 0.6% in Wales while in London rents were unchanged.
- The DPS report found rental growth in only four regions, the South East, the East Midlands, the North West and Wales and rents fell by 1.39% in London.
- The latest Rental Index published by Landbay also found wide regional variations with the highest in increase in rents in the East Midlands, the East of England and the South West
- Homelet reported that rents had increased in all of the regions apart from Wales and the North East. Rent increases were highest in Scotland (5.6%) the East Midlands (3.3%) and the West Midlands (2.4%).
At the regional level this presents a very mixed picture. In search of greater clarity we turned to sources that provided data at city or district level.
A report from estate agents Your Move found that some of the highest increases in rents of around 3.2% were in the East Midlands region In Derby, Leicester and Nottingham. Landbay also reported high rent increases of 3.3% in Nottingham and 3.4% Leicester.
The Buy to Let Index Report published by property finance company Lend Invest also offers some pointers. In the latest edition the top locations for rental growth are Brighton, Leicester, Truro, Shrewsbury, Romford, Newport, Birmingham, Bristol, Dorchester and Luton.
For BTL investors the overall picture is low to moderate rent increases in most locations. This may limit the scope for passing on the increased costs from changes in taxation of buy to let. Investors in search of higher returns should consider the options for higher rents such as investing in an HMO.
Find Out More
We will all be discussing the latest position on the property market, both in Bristol and across the UK, at our next PIM on Thursday 28 June 2018 at Future Inn, Bristol City Centre, 6-9 pm.
We hope you will join us then.
For more info and to reserve your place Click Below