Landlords and tenants may wish to read the HomeLet Rental Index covering May 2017. It provides some interesting information about rental payments being charged by landlords.
In respect of new tenancies, the rent being charged on UK investment properties in May was an average of £901 per month. When compared with May 2016, this figure was 0.3% less and is the first time that a reduction in rental income has been seen since December of 2009.
It is Greater London that has seen the largest percentage drop with a reduction of 3% when compared with May last year. The average rent being charged in that part of the UK was £1,502 per month.
The North East saw a fall in rental income in May of this year with a 2.3% reduction over a period of 12 months to an average of £522 per month.
Scotland saw a drop in rental income in May 2017 when compared with the same month last year. Rental income fell by 1.9% to an average of £622 per month.
The South East saw rental income drop in May 2017 by 1.5% to an average of £998 per month in comparison to May 2016.
Yorkshire and Humberside witnessed a fall in rental income in May of this year of 0.6% to an average of £614 per month when compared with May 2016.
Landlords owning an investment property in East Midlands saw their average rental income go up by 3.3% per annum to £614 per month when compared with May 2016.
The North West saw rental income increase by an average of 2.2% per annum in May 2017 to £679 per month when compared with May 2016.
The South West saw average rental incomes go up by 2.1% to £803 per month when compared with May of last year.
Details of rental incomes in other parts of the UK can be found on the homelet.co.uk website.
Landlords will no doubt find it interesting to see what happens in the coming months with rental payments being charged. In certain parts of the UK it would appear that tenants might be able to negotiate how much they are willing to pay to rent a home.
If you are a landlord then you will no doubt wish to maximize the rental income that you receive on your investment property. You will probably look to periodically increase the rent that your tenants pay.
You may be interested in what is happening to rental values around the UK so the following information extracted from the HomeLet Rental Index should hopefully prove informative. The rental amounts relate to new tenancies for the month in question obtained from their reference service for tenants.
Apparently, in April 2016, the average rental value in the UK for properties outside London amounted to £764 pcm. In April 2015 the amount was £728 pcm so we have seen an increase of 5.1% in the last 12 months.
It is interesting that in Greater London the average rental value has increased by 7.7% when comparing April 2015 with April 2016 to £1,543 pcm. The biggest % increase was witnessed in Scotland where rental values went up by an average of 11.4% in the 12 months between April 2015 and April 2016. In the North West average rental values actually dropped by 1% when comparing April last year with April this year.
The West Midlands saw a rise of 2.2% in average rental values to £659 pcm up from £644 pcm in April 2015. However the East Midlands saw a big rise in average rental values with an average of £646 pcm being paid by private tenants in April 2016 compared to £599 in April last year – a rise of 7.9%. Wales saw average rental values rise by 4.3% – up from £573 pcm in April 2015 to £597 pcm in April of this year. In the South West average rental values rose by 3.2% to £891 pcm in April 2016 up from £863 pcm in April 2015.
We trust that some landlords have found the above information to be of benefit to them. Further data is available on HomeLet’s website so you may wish to take a look at it.
If you are a landlord then you may find October 2015’s HomeLet Rental Index of interest as it provides information about various things including how much their new tenants are paying on average per month in rent in different parts of the UK. Below, we highlight some of the statistics.
The majority of the regions in the UK have seen average rental income being charged increase in the 12 months to October 2015. On average, rental income rose by 9.7% across the UK during this period from £909 being charged in October 2014 to £997 being charged in October 2015.
The exceptions were in Northern Ireland that saw a drop of 2.1% to £588 pm, East Anglia with rental income falling by 1.2% to £809 pm and the North West where rentals fell by 4.9% to an average of £635 pm.
The largest percentage increase in the amount of rent being charged on a monthly basis was in Scotland where an increase of 9% was seen from £610 to £665 although this is lower than the average rental for September 2015 of £678 pm. Greater London saw rental income rise by 7.5% from £1,451 pm to £1,560 pm in the last 12 months. East Midlands saw an increase of 5.9% to an average of £628, the South East saw rental income being charged by landlords rise by 4.3% to £944 pm on average, the South West saw rent go up by 4% to £872 pm, the West Midlands by 2% to an average of £669 pm, Yorkshire and Humber by 2% to an average of £621 pm and Wales saw an increase of 1.8% to £614 pm.
The average rental charged by landlords across the UK but excluding Greater London has gone up by 3.5% from £724 per month to £749 per month during the above period. This means that the average rent being charged by landlords renting out properties in Greater London is more than twice what is being charged throughout the rest of the UK.
Another interesting statistic relates to tenants annual income. In the UK this has increased by an average of 1.7% in the above period.
We do hope that landlords find the above information useful. We will provide another update in the coming months.
According to the HomeLet Rental Index for May 2015 the rent being charged by landlords on properties in London is increasing at a higher % than elsewhere in the UK. This is probably not going to come as a surprise to most people as it merely follows what tends to happen with property values in our capital city.
The index reveals that new tenants in the three months to May 2015 taking up occupation of a property in London would pay an average of £1,472 pcm – that is an increase of 9.2% when compared with the three months to May 2014. In the rest of the UK, rents went up by 7.6% to an average of £738 pcm when comparing the same periods.
It is interesting that the index also looks at the rise in income tenants received for the same period as this showed that, across the whole of the UK, incomes only went up by an average of 2.4%.
When the average rent someone is paying in May 2015 is compared with what they were paying in May 2014 in the UK it was found to be 12.5% more – £960 pcm.
Obviously, from the landlord’s point of view, these figures will make pleasing reading. However, anyone considering entering the lettings market as a new landlord should make sure that they do all their research to establish if their new venture is likely to prove to be a profitable one.
A new landlord should prepare a detailed business plan taking into account numerous factors to help establish the viability of their new venture. For instance, it is not only about how much rental income they can get for a particular property but also things like what expenditure the business will have such as buy-to-let mortgage repayments, landlord insurance estimated maintenance costs to name but a few. The location and type of the property is also very important.