The UK rental market is firming according to Your Move, the UK’s largest lettings agent. After a dramatic readjustment, which saw rents fall by an average of 12% from July 2008’s peak to the trough in February 2009, average rents are now stabilising. May saw rents rise 1% from their level in April to a UK average of £642 per month, a drop of 7.3% from May last year.
David Newnes, managing director of Your Move, said: “The start of 2009 saw the lettings market tumble with February’s data particularly weak. But more recent stats show that things are beginning to improve slightly. The increased supply of stock on the lettings market ebbed in May, prompting rents to strengthen marginally.”
Rents fell 11% from the series high in July 2008 to £642 per month in May. Tenants signing leases now are saving an average of £967 per year in rent, compared with those who committed to a new lease last summer. As stock levels drop back into line with tenant demand, rents will rise and this saving will be hit.
“Now is a good time to start a lease if you’re a tenant – rents are expected to rise from here on in as the housing market starts to recover.” Newnes continued, “Many amateur landlords who were letting their properties last summer because they couldn’t sell will be putting those properties back on the sales market. That means potentially less rental stock and more competition between renters for the best properties – rents are already rising slowly as landlords find themselves in a stronger position.”
Tenant demand is historically high – the number of new tenants registering to rent has ballooned 20% in the past year.
Newnes continued, “A spate of more positive housing market data is encouraging ad hoc landlords to abandon the rental market, but unfortunately there are two sides to the coin. Would-be buyers are still struggling to get a mortgage – and lenders are hiking up their fixed rates again. The impact on demand for rented accommodation is abundantly clear – we’ve never seen so many new tenants signing up.”
There is a mixed picture across the UK. London rents were the highest in the country in May at £884 per month. The London lettings market is recovering strongly with average rents rising 5.5% month on month.