21st October 2015
Rent rises for one bedroom flats accelerated sharply in September, sparked by high demand from recent graduates wanting to live near their first job.
Rents for one beds saw an annual rise of 3.9% in September, up from 2.9% in August, reaching an average of £1,054 according to the monthly Landbay Rental Index, compiled by MIAC, a data analytics consultancy.
The new index, which launched last month, tracks rental trends to the county and London borough level in combination with the number of bedrooms.
The largest rental increases for one-bedroom flats were in Edinburgh (up 12%), Swindon (up 11%) and Southend on Sea (11%) although these were from a lower base than some parts of the country.
Last week Government labour market statistics revealed that the UK has the lowest unemployment rate since 2008. The employment rate for those aged 25-34 is at its highest level in over twenty years at 81.1%.
While the costs of renting are increasing, this coincides with a fall in other costs (September CPI) and UK-wide wages rising at 3%.
The index reveals that rents for three bed properties are seeing the biggest overall rental rises, up 4.8% year-on-year to £1,489 in September.
Across all properties, UK rents rose by 3.7% in the last year to an average £1,288. This was the first increase in annual growth since February, when the average monthly rent was £1,277.
John Goodall, co-founder and chief executive of Landbay, says: “The upward trend in UK rents can simply be explained with one word: jobs.
“The UK’s job market is going from strength to strength and the rental market is staying hot on its heels.
“The sharp seasonal jump in rental growth for one beds reflects a buoyant graduate job market as people move to their first job.
“Flexibility and freedom is the order of the day for first jobbers, and one bedroom flats offer the perfect springboard to take the plunge into full-time working life.
“One bed flats are also popular for couples and young professionals who don’t want to flat-share.
He adds: “For potential investors, these rental figures show how resilient residential property is as an asset class – even when you have unusual economic forces combining like the current mix of low inflation, low interest rate, and high wages.”
Table 1: Top Ten Rental Risers – 1 bedroom
|Counties outside of London||Annual rental change (September 2015)||Average rent|
|Southend on Sea||10.5%||£610|
|Windsor and Maidenhead||6.8%||£925|
Table 2: UK rental increases – all bedrooms
|Rent changes in UK and nations||Annual rental change (September 2015)||Average rent|
|England exc London||2.8%||£746|