16th January 2015
A new ‘fire in the market’ has pushed up rents faster than expected for this time of year.
A letting index from estate agents Your Move and Reeds Rains has shown rents increased3% in 2014 – six times the record low rate of inflation.
This momentum has continued in 2015 as a larger number of people than expected continued to move rental properties over Christmas and rental prices are increasing more than normal for this time of year.
According to the index, the average monthly rent in the UK was £767 in December, up from £745 the year before. Although rents were up on an annual basis, they were down slightly on a monthly basis – reducing 0.1% between November and December.
Adrian Gill, director of Your Move and Reeds Rains, said the dip is smaller than could normally be expected for December as tenants do not typically look to relocate over the Christmas period.
‘There appears to be a new fire in the rental market as we enter 2015,’ he said. ‘Demand for homes to let is hotter than we would normally expect at this time of year.’
The East of England saw the largest increase in rents last year, with the average rent up by 7.6% to £771 over the year. The East Midlands and London have also seen increases, up 6.2% to £581 and 4.1% to £1,177 respectively.
There were just two regions that ended the year with lower rents; the North East and South West. In the North East rents fell 2.1% to £514 on average and in the South West they dipped 1% to £655.
While rentals were strong in December, tenant finances deteriorated somewhat – which is often the case with tenants juggling the cost of Christmas.
A total of 8.9% of rents were in arrears in December, up from 7.5% the month before.