British rental prices climb 5.75% in just one year

The average price of buying a home in the UK property market may have started to see signs of decline in recent months, but according to new data, the rental market is performing far better than its counterpart.

The latest index released by letting agents Belvoir shows that the average price of renting a home across the UK has now increased to £770 per calendar month as of the end of the first quarter of the year. It means that, in the space of just 12 months, the average tenant has seen rental prices increase by 5.75 per cent.

Such strong rental market figures show the stark contrast between the purchasing and renting sectors in UK property at present. While political uncertainty is driving buyers to develop something of a wait-and-see attitude towards transactions, demand in the private rented sector remains very high, and landlords are able to welcome higher prices and stronger returns as a result.

So far in 2017, the strongest areas of the country for rental property prices have been the East Midlands and Yorkshire, each of which has seen costs for tenants rising by around seven per cent in the space of 12 months. On the flipside, the south-east, surprisingly, has seen prices decline somewhat in the same period.

Belvoir chief operating officer Dorian Gonsalves said the differences in price changes in different parts of the country are no surprise given the way the market is acting at the moment. He said in market towns and other areas where prices have climbed by seven per cent, one of the man trends is that few new landlords have been coming to market, leading to a shortage of homes and competition between tenants.

“As a result of this stock shortage, properties are often rented to the highest bidder, typically the wealthier tenant, which is raising rents beyond the traditional four per cent to five per cent plus or minus trend,” he added.