Average rents continue to drop but tenants are sticking around for longer, figures from HomeLet suggest.
HomeLet’s latest rental index shows that rents on new tenancies increased by a yearly average of 3% in October, but down 0.9% since September to £902.
In some good news for those worried about void periods, tenants are now staying for an average 28 months, the longest duration for some time, according to HomeLet.
In Greater London, rents on new tenancies rose by 2.5% over the year to October, having been increasing at a rate of more than 7% a year ago. In the broader South-East region, rents rose at 2.7% on an annualised basis in October, down from above 4.3% this time last year.
The biggest annual increase was in the West Midlands at 5.1% to £663, down 0.3% on September.
Martin Totty, chief executive of HomeLet, said landlords appear to be doing what they can to balance rents with affordability.
He said: “With a period of greater economic uncertainty predicted, with potential impacts on inflation, interest rates and growth, rental property ownership presents both risks and rewards.
“Reassuringly, the private rental sector has plenty of experience and expertise to advise property owners on products and services to protect their asset as well as their rental income in the event of an unexpected change in the circumstances of their tenant.”
| Region | Average rent in October 2016 | Average rent in September 2016 | Average rent in October 2015 | Monthly variation | Annual variation |
| West Midlands | £663 | £665 | £631 | -0.3% | 5.1% |
| North West | £676 | £683 | £648 | -1.0% | 4.4% |
| Wales | £609 | £609 | £586 | 0.1% | 3.9% |
| East of England | £904 | £904 | £871 | 0.0% | 3.7% |
| Northern Ireland | £592 | £594 | £573 | -0.4% | 3.3% |
| East Midlands | £601 | £602 | £583 | -0.2% | 3.1% |
| South East | £999 | £1,020 | £973 | -2.1% | 2.7% |
| Greater London | £1,542 | £1,555 | £1,504 | -0.9% | 2.5% |
| Yorkshire & Humberside | £619 | £621 | £605 | -0.3% | 2.3% |
| South West | £787 | £799 | £772 | -1.5% | 1.9% |
| North East | £525 | £530 | £519 | -0.9% | 1.3% |
| Scotland | £606 | £610 | £608 | -0.8% | -0.4% |
| UK | £902 | £910 | £875 | -0.9% | 3.0% |
| Notes: | Based on new tenancies in October 2016 | Based on new tenancies in September 2016 | Based on new tenancies in October 2015 | Comparison of average rent in October 2016 and September 2016 |
Countrywide has also released its latest Monthly Lettings Index and draws an interesting conclusion that the number of tenants with a spare room has fallen to the lowest level on record.
In a competitive market it is hard to imagine tenants being so picky, but the agent claims just one in three new tenants in 2016 rented a home with a spare bedroom, down from 59% in 2010.
The research claims rising rents have pushed the cost of an extra bedroom to £295 a month and says tenants have increasingly shied away from paying for space they don’t absolutely need.
Countrywide says renters in the capital are least likely to have a spare bedroom, but the figure is very similar for tenants in big cities across the South of England. See the table below.
| 2016 | 2010 | |
| London | 26% | 61% |
| South East | 31% | 55% |
| Scotland | 32% | 56% |
| South West | 33% | 57% |
| East of England | 36% | 58% |
| Wales | 36% | 58% |
| West Midlands | 39% | 59% |
| Yorkshire and the Humber | 40% | 61% |
| North East | 45% | 63% |
| North West | 45% | 66% |
| East Midlands | 48% | 68% |
| Great Britain Total | 35% | 59% |
Overall, Countrywide says the cost of a new let rose just 1% across Great Britain in the past year to £947, the slowest October increase since 2010.
| Ave Rent Oct-16 | October Rent YOY | September Rent MOM | |
| Greater London | £1,302 | 0.20% | -0.80% |
| Central London | £2,475 | -0.20% | 0.30% |
| East of England | £996 | 4.10% | -1.40% |
| South East | £1,150 | -3.00% | -4.00% |
| South West | £850 | 3.70% | -1.80% |
| Midlands | £702 | 2.50% | -0.30% |
| North | £674 | 2.10% | -2.60% |
| Scotland | £700 | 4.60% | -0.80% |
| Wales | £688 | -0.40% | -1.10% |
| GB Total: | £947 | 1.00% | -1.70% |
Johnny Morris, director of research at Countrywide, said: “As affordability pressures have risen, for many tenants, extra space has become a luxury.
“Sacrificing extra bedrooms and sharing has helped renters to absorb higher prices. But those living in the South are close to a point where there’s not much more room to squeeze, meaning rental growth is likely to be capped by tenants’ incomes for some time.
“The second half of 2016 has seen the rental market slowly swing towards the tenant. The pace of rental growth has slowed throughout the year. October was the first time in over two years the cost of renting a home didn’t rise faster than the rate of inflation.”
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