12 Jul 2021

The HomeLet rental index for June is reporting the average rent in the UK is now at a record high of £1,007 pcm, up 5.9% on the same time last year, and up 9% on June 2019.

Despite adversity, the London rental market has seen the first price increase for over a year, up 1.5% annually to £1,607 pcm. However, this is still lower than the pre-pandemic average in June 2019 of £1,611.

Excluding London, the average UK rent is 8% higher than last year at £861 pcm and up 10% on the 2019 average.

The South West of England saw the highest annual price rise up 10.5% to £948 pcm and Scotland the highest month-on-month inflation of 4.4% with a new average rental standing at £738 pcm

However, the inflationary pressures have eased two regions of the country with the North East falling by 2.3% month-on-month to an average of £547 pcm.

Andy Halstead, Group Chief Executive Officer commented: “Throughout the Coronavirus pandemic, the Government rightly took measures to protect tenants but didn’t go far enough to balance the protection for landlords. It’s a continuation of the theme that we’ve seen for many years, with landlords being penalised by higher taxes and increased complexity in obtaining possession of their properties.

“In simple terms, increased costs for landlords mean increased costs for tenants. Some landlords have exited the market whilst the stamp duty holiday has stimulated the sales market, impacting the stock level. These are all factors driving an increase in rental values for new tenancies, which are way above the rate of inflation.

“The private rented sector plays a critical role in the UK’s housing market. As restrictions begin to ease, the flexibility provided by rentals will be crucial to mobility across the UK and as a means to access affordable housing that fits the varying needs of a diverse range of tenants.

“The sector works best when there’s a mutual balance between tenants, landlords and letting agents. The Government can’t treat the rental market as an afterthought. Policies that solely focuses on homeownership will only deepen the issues in the UK’s housing market.

“Some people might be shocked to see the average UK rental price tip over the £1000 mark, yet supply and demand dynamics will only continue to drive rental prices upwards for the rest of the year, and we’ll see more records broken in 2021.”

Commenting specifically on London: “The impact of Brexit on international tenants has been exacerbated by the pandemic, noticeably in London. Positively, this month we can see the demand for rental properties in London growing, not only through the increase in rents but also the volume of new lets that we’ve seen in the Capital.

“After a year where demand and rental values have dipped, we can expect to see growth again as the impact of the pandemic gradually subsides.”

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