There was been a 3.0% rise in rents during 2014, despite falling on a monthly basis between November and December, according to the latest Buy-to-Let Index from Your Move and Reeds Rains.
Average rents in December were 0.1% lower than seen in November 2014
The average residential rent across England and Wales now stands at £767. This compares to £745 in December 2013.
“There appears to be a new fire in the rental market as we enter 2015,” said Adrian Gill, director of estate agents Reeds Rains and Your Move. “Demand for homes to let is hotter than we would normally expect at this time of year.
“Recent months have shown a divergence from usual seasonal norms. Historically, there is a tendency for rents to ease in the winter, particularly December. With fewer tenants willing to relocate in the festive period, landlords usually compete to fill empty properties and agreed rents tend to dip as a result. Last month that happened – and rents fell compared to November – but by much less than the usual extent.
“In particular a jobs boom across the eastern regions of England has seen a larger than usual number of people relocating in the winter months. This has pushed up rental prices in these regions even further.”
When drilling down regionally, the index reported that rents are higher than a year ago in eight out of 10 regions of England & Wales. This is led by the East of England, with a 7.6% annual increase. The East Midlands has seen rents rise by 6.2% on an annual basis, followed by London where rents are up 4.1% over the last 12 months, and Yorkshire & the Humber with a 3.4% annual increase. As a result, these four regions have seen a new record for rents in December.
By contrast rents in two regions are lower than a year ago. Average rents in the North East fell by 2.1% over the course of 2014, while rents in the South West are 1.0% lower on an annual basis.
Most recently, three regions have seen rents continue to rise between November and December, despite an overall drop on a monthly basis across England & Wales. This is led by London with rents 0.9% higher in December than in November, followed by a 0.7% rise in Yorkshire & the Humber and a 0.2% month-on-month increase for the East of England.
The South East has seen the sharpest month-on-month fall in the cost of renting, down 1.5% between November and December. This is followed by a 1.3% monthly drop in the North West and rents in Wales which are now 1.1% lower than in November.
Tenant finances deteriorated in December, as is often seen over the festive period. The proportion of all rent in arrears stands at 8.9% as of December 2014, up from 7.5% in November.
However this represents an improvement compared to December 2013, when 9.7% of all rent was in arrears. Moreover, looking at average proportions of rent in arrears over the course of each year as a whole, it appears that arrears are improving every year.
Over 2014 as a whole, tenant arrears average 7.5% of all rent, down from an average of 8.1% over the previous twelve months.
Gill added: “December is always a testing time, and it’s abundantly clear that many households aren’t out of the financial woods yet.
“But looking at the big picture improvements, 2014 has been a success. There is a clear trend towards renters being more in control of their finances. December’s setback is just that. Even taken alone in 2014, December represents an improvement from the worse spike in arrears witnessed in December 2013.”