With an increasing demand and a lack of supply of rental homes, costs of renting are continuously accelerating. At 1.3%, annual rental price growth across the UK in the year to May is at its highest level in 18 months, according to the latest figures released by the Office for National Statistics.
Knowing the average rent in London is important for buy-to-let landlords, particularly if you’re on the hunt for a buy-to-let property in the London area. Identifying the average rental costs in each area will give you an understanding of your potential rental yield, whilst giving you an influence on the pricing of your monthly rental costs. This will also determine how easy and quick it will be to find a potential tenant. Of course, rental costs will vary depending on a variety of factors, including the location, number of bedrooms and facilities.
According to Forbes, the number of UK renters has increased by 63% in the last decade, which is often due to affordability for first-time buyers, the financial uncertainty of being able to afford monthly mortgage repayments and a change in society expectations, with renting becoming a clear ‘primary option’ for those looking to move.
It’s worth noting that whilst the cost of renting is increasing year on year, salaries are too. Average earnings have risen by 3.8% in 2019, with rental costs increasing by 2.6% within that same period. The average renter in the UK spends around 31.9% of their monthly earnings on their rent, which calculates as the same in 2018.
Rental Costs in London
In particular, London has seen some rent increases due to a shortage of properties and an increased demand for professionals looking to relocate. With luxury accommodation, incredible facilities and a wide range of pubs, bars and restaurants within the area, London has become a hotspot for relocating to.
With thousands of young professionals moving to the capital each year, single rooms, one-bedroom apartments and studio properties are highly sought after. The average cost of a rented room in London is £789, a one-bedroom property is £2,200 and a two-bedroom property sits at around £3,244 on average, per calendar month (PCM).
Average rental growth across the London region averaged -0.1% during 2018. The 0.9% rise recorded this month was the highest rate of growth across the capital since September 2017, with an ongoing shortage of properties available for tenants.
In Nine Elms rents are increasing at an even faster rate. This is due to the area maturing – as the area develops, demand increases. In Embassy Gardens we expect rents to rise further as the year goes on, due to the completion of Legacy building and the impending arrival of the hotly anticipated sky pool.
It’s a similar story in West Hampstead, where we’ve seen steady growth this year – a trend we expect to continue. At the moment we’re seeing increases between 5%-7% – well above the London average. Over in Royal Wharf in East London, rents are remaining steady after a 10% increase last year. Rents are expected to go up again in line with completions in 2020 and 2021.
Rental costs around the UK
Further afield, in the North East of England they’ve seen a 0.5% increase in rental prices, the highest level of the growth since the summer of 2017. The East Midlands, South West and Yorkshire and the Humber are currently ranked the top three regions for growth, with rents rising by 2.1%, 2.0% and 1.8% respectively.
Across the East of England, South East and South West, rental price growth currently exceeds annual levels of house price growth.
In a recent study conducted by Zoopla, rental costs in Nottingham, Birmingham and York have increased by over 5% in the past 12 months, which is more than double the UK average. This is thought to be down to increased demand in these popular areas whilst the house prices are increasing.
Managing your rentals
With years of experience and in-depth local market knowledge, our lettings and sales team are experts in matching people with their perfect property. JOHNS&CO landlords and tenants are well looked after and receive an unprecedented level of service.
Want an instant lettings market appraisal to see what prices you can achieve for your rental property? As a landlord with JOHNS&CO, you will receive a tailored range of services from our experienced lettings team, allowing you to benefit from a dedicated property manager on-site at each development we represent, a tailored marketing campaign to advertise your property to rent and our vast links with corporate companies.
We know how important it is to keep void periods minimum, and we do everything we can to minimise them. This commitment has seen us let property in new build developments up to six months ahead of completion.
To discuss your requirements in more detail, please contact us. Please find information about our fees here.