Subscribe to our monthly newsletter

Get the knowledge and inspiration you need to help you build
a profitable portfolio - straight to your inbox!

Residential buy-to-Let

Rental rises now at their fastest since 2010

Author: Staff





Landlords investing in the UK’s buy-to-let market are now seeing their assets growing in potential value at the fastest rate since 2010, according to the latest buy-to-let report released by Your Move and Reeds Rains.

The estate agents’ analysis of the market showed that the average rental price in the UK now stands at a total of £774 per month on average. It said that prices landlords are able to achieve for their properties have been pushed forward in the past 12 months by the rise in real earnings and wages across the country, along with the ever-increasing demand from people looking to rent as a choice rather than because they cannot afford to buy a home.

It said that in the last month, the average price of renting a house in the UK had climbed by 0.8 per cent. This was the fastest rate of increase recorded in any month since September, showing activity picking up as we edge ever closer to summer and the busiest period of the year.

However, it was the yearly figure that really showed how strong the rental market is at the current time. Your Move and Reeds Rains report that in the past 12 months, the average rental price per month has climbed by 4.6 per cent. The report states that this is the fastest annual climb seen since mid-2010, bringing real positives for landlords operating in this marketplace.

Adrian Gill, director of Your Move and Reeds Rains, said this was largely thanks to the stronger financial situation of the average person across the UK.

“Economic progress has brought about a slow but steady stream of household earnings and employment, the most basic requirements for rent rises and these modest improvements have driven rents up at record speed. People have more money in their pockets,” he added.

Conditions at the moment also mean that this growth is even more significant than in 2010. Five years ago, demand was strong in the rental market for a very specific reason. In the aftermath of the credit crunch, Brits were finding it hard to get themselves approval for a mortgage, and as a result, many were having to rent rather than buying their own home. This demand meant that landlords were able to welcome far higher prices than they had previously.

However, five years on, the rise in prices comes from a far steadier place. Demand at the moment is being sustained in spite of the fact the market for purchasing houses is strong. This is because many younger people in particular are opting to rent out of choice rather than necessity, enjoying the freedom that renting gives them with regards to their careers and moving at short notice, for example.

The fact this is a choice rather than something they need to do is important for investors. It means that the rises we’ve seen are likely to indicate a strong market for the foreseeable future. Demand is unlikely to drop significantly, so landlords can expect their investment to be steady for a number of years.

You may also like: