You are here: Home - Household Bills - News -

No sign of seasonal dip as rents rise in October

Written by:
Average UK rents climbed 0.7 per cent month-on-month in October to £1,294, according to the monthly Landbay Rental Index.

The UK rental market is commonly hit by “seasonal slowdown” in the autumn, as summer demand from students, and tenants whose contracts have expired reduces significantly.

However, no slowdown was evident this year, as rents climbed month-on-month and year-on-year and across the UK in October, with the only exception being Scotland, which saw a marginal monthly fall of 0.1 per cent to £696.

Landbay attributes this convention-busting rise to a combination of wage growth and unemployment reaching its lowest level since 2008.  The last time there was a sustained period of falling rents in the UK was the winter of 2012/3, when rents saw monthly falls from August 2012 to April 2013.

Rents increased every month in 2014, and have been strong this year, seeing only small month on month decreases between June and August before increasing again in September and October.

The chart below illustrates UK rent growth from January 2012 to October 2015.


Source: MIAC

October’s rent increases were fastest for three bed properties, rented by families moving for work (up 4.7 per cent year-on-year), and one beds popular with first jobbers and young professionals (up 4.4 per cent).

Increases in the UK are being driven by London and the southeast. In October, London rents increased by 4.1 per cent to an average of £2,063, whilst rents in the southeast rose by 3.4 per cent to £1,033.

The impact of London on the national private rental sector is becoming increasingly evident by the surge in rents among commuter hotspots. Southend on Sea, historically not well-known for its commuter town status, has seen consistently faster growth in rents than the national average. The seaside town’s one hour direct train into London and recent gentrification have played their parts in an annual rental increase of 9.7 per cent, to an average of £759 per calendar month.

Out of the top twenty areas of the UK outside of London to see the fastest rent increases, just Aberdeen, Edinburgh and Bath were outside the southeast.

John Goodall, co-founder and CEO of Landbay, said: “Seasonality has always been a strong feature of the UK’s rental market so the fact that it appears to be declining in influence is a powerful sign of the increasing strain the private rental sector is under. The simple fact is more people are renting for longer and there aren’t enough properties to meet demand.

“In previous years, price-conscious tenants could take advantage of the seasonal dip in rents to find cheaper rents in the autumn or winter. Consistent rent rises throughout the year have taken away that option in large parts of the country.

“The almost uninterrupted monthly rental increases we have seen since spring 2013 show that residential property is a resilient asset class that has performed exceptionally well during a period of low inflation.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week