rental index report · 2018-07-04 · london scotland wales northern ireland £1,231 £1,879 £732...

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Rental Index ReportMarch 2018Powered by MIAC

Key Feature: The Regional Cost of Renting

Area Spotlight: North-East

Analysis: UK Rents vs Tenant Affordability

Statistics: March 2018

Rental Breakdown: Average Rents Across England

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Average Rental Price Rise Across the UK - Year on Year

England

London

Scotland

Wales

Northern Ireland

£1,231

£1,879

£732

£647

£568

0.64%

-0.28%

1.15%

1.55%

1.35%

Statistics: March 2018

Tenants pay an average of £1,879 for properties in London and £761 for properties in the rest of the UK

Tenants occupying properties in London are now spending an average of £1,455 on rent for 1-bedroom properties, £1,923 for 2-bedroom properties and £2,680 for 3-bedroom properties. Conversely, tenants occupying properties in the rest of the UK are paying an average of £601 on rent for 1-bedroom properties, £717 for 2-bedroom properties and £829 for 3-bedroom properties.

Since March 2017, average rents in the UK have risenby 0.69% to £1,200. In England, rents were up by 0.64%to £1,231/ month; in London, rents fell by -0.28% to £1,879. In Northern Ireland, rental prices rose by 1.35% to £568/ month. Meanwhile, in Scotland, rents rose slightlyto £732/ month, following an average annual growth of 1.15%; in Wales, the average rent rose by 1.55% to £647.

Average Rent by No. of Beds

1 2 3 £1,455 £1,923 £2,680

Rental prices according to no. of beds

1 2 3 £601 £717 £829

Rental prices according to no. of beds

London Rest of UK

Average Rent in London vs Rest of UK

Rest of UK

London

£761

£1,879

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Key Feature: The Regional Cost of Renting

Rent Rise Bites a Bigger Chunk Out of Tenant Take-Home Pay

Rental payments in the UK now account for over half (52%) of the average disposable income of £1,471 for people living and working outside the capital, according to the latest Landbay Rental Index, powered by MIAC. The average rent paid for a residential property in the UK outside London hit £761 in March, taking annual growth to 1.21%.

Average rents in the South East now stand at £1,053. This is 58% of the average disposable income of £1,817 of those living in the region, whilst another option is East England, where average rents are 55% of take-home pay.

On the other end of the spectrum, those working and living in North East see the lowest percentage of their salary going towards rent, where just 41% of their average disposable income of £1,350 is handed over to the landlord each month.

Those living in the capital face an even tighter squeeze. Average rents in London remain more than double the average for the rest of the country at £1,879, despite rental growth only recently returning to positive territory. Average disposable income in London is £2,108 so for single-earner households that means the average monthly rent for a property eats 89% of their take-home pay. Accordingly, most London households must rely on multiple or high-income earners.

If London workers are willing to move further afield to save money, they can expect to spend a far lower percentage of their disposable income on rent, closer to the national average.

John Goodall, CEO and founder of Landbay said: “Rents have continued to rise over the last five years, increasing by 9% across the UK since March 2013 and by 7% in London, with monthly payments remaining a burden on those struggling to save. Tenants saving for a house face a triple-challenge with more and more of their income spent on rent, partnered with trying to catch-up with the pace of house price inflation and record-low interest rates limiting their ability to save money.”

“There has been much speculation about the long-term future of the buy-to-let sector from an investment perspective, however, demand remains strong as brokers would attest. Not a day goes by when there isn’t more news about the supply-demand mismatch in the UK housing sector and until this is resolved, tenants will continue to rely on the private rented sector to support them. With the right property and the right location, there are attractive yields to be had, and consistent rental demand will drive returns in the long-term.”

1 ONS Regional gross disposable household income (GDHI)

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Regional Rental Growth Across England

North West

North East

Yorkshire & Humber

East of England

South East

South WestLondon

East Midlands

West Midlands

£1,350 41%

£2,108 89%

£1,356 43%

£1,650 55%

£1,411 44%

£1,410 44%

£1,380 50%

£1,594 47%

£1,817 58%

Percentage of Average Tenant Take-Home Pay Spent on Rent Across UK

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£619

Monthly gross disposable income per head (£)

% disposable income spent on rent

£1,053 £553

£627

Source: ONS data

£749 £910

£577 £1,879 £686

North West South East North East

East Midlands South West East of England

Yorkshire & Humber London West Midlands

Average Rents Across England

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1,207 0.74

Year on Year (%)

Average rent (£) Average growth

1482 -0.73

1012 1.48

1442 -0.44

1182 0.60

2228 -0.22

2109 0.51

1129 0.28

Borough

Barking & Dagenham

Barnet

Bexley

Brent

Bromley

Camden

City of London

Croydon

Ealing 1471 -0.52

Enfield 1257 0.55

Greenwich 1318 0.34

Hackney 1726 -0.88

Hammersmith & Fulham 1880 -1.14

Haringey 1397 -0.37

Harrow 1320 -0.51

Havering 1078 0.84

Average Rental Growth Across London

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1391 -0.41

Year on Year (%)

Average rent (£) Average growth

1859 0.34

3035 -1.08

1269 -1.34

1655 0.25

1240 0.05

1472 -0.44

1489 0.32

Borough

Hounslow

Islington

Kensington & Chelsea

Kingston upon Thames

Lambeth

Lewisham

Merton

Newham

Redbridge 1252 0.55

Richmond upon Thames 1568 -0.90

Southwark 1698 0.36

Sutton 1061 0.34

Tower Hamlets 1735 -0.33

Waltham Forest 1252 0.46

Wandsworth 1725 -0.70

Westminster 2909 -0.49

Hillingdon 1191 -0.04

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Area Spotlight: North-East

The UK’s Smallest Lease Feast

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With average rents of £553/ month, the North-East boasts some of the lowest average rental prices across England. It’s no wonder that certain parts of the region, such as Tyne & Wear and Middlesbrough are experiencing a rise in popularity, as tenants look for a lease that bites a smaller chunk out of their monthly earnings.

In the North-East, average monthly tenant income is £1,350. This is almost £800 less than tenants living in London. However, the average percentage of take-home pay that is consumed by rental payments is 41%. This is the lowest percentage of all regions in England and less than half that of London (89%).

One of key reasons for this difference is greater desirability to rent in London, over other areas of the country. As the UK capital, London is especially attractive for the younger generations, keen to develop their careers. However, as demand continues to exceed supply, so rental prices remain high to steal a much bigger chunk of tenant take-home pay, despite their, on average, higher salaries.

For 1-bedroom properties in the North-East, tenants can expect to pay an average of £448/month. For 2-bedroom properties, this increases to £504/month, while for 3-bed properties it rises to £595/month. Compared to average rents in the UK capital, rental prices are almost 3.5 times cheaper in the North-East.

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Region AreaAverage %

change (YoY)Rental pricesby beds (£)


Average Rentalprice (£)

Surrey

Tyne & Wear

Cheshire

Bath and North

Hertfordshire

Northamptonshire

Warwickshire

York

Kensington &Chelsea

East Somerset

1 x

1 x

1 x

1 x

1 x

1 x

1 x

1 x

1 x

2 x

2 x

2 x

2 x

2 x

2 x

2 x

2 x

2 x

3 x

3 x

3 x

3 x

3 x

3 x

3 x

3 x

3 x

-0.09%

0.75%

0.73%

2.60%

0.79%

2.56%

1.68%

1.02%

-1.08%

£1,440

£599

£705

£977

£1,150

£731

£824

£763

£3,035

£912

£463

£494

£820

£843

£548

£628

£648

£2,123

£1,200

£548

£647

£999

£1,116

£686

£786

£783

£3,233

£1,548

£651

£749

£1,202

£1,442

£810

£861

£919

£5,444

SouthEast

NorthEast

NorthWest

SouthWest

East of England

EastMidlands

WestMidlands

Yorkshire& Humber

London

Areas with the Highest Rents England, by County

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Region AreaAverage %

change (YoY)Rental pricesby beds (£)


Average Rentalprice (£)

Isle of Wight

Hartlepool

Blackburn

Torbay

Peterborough

Derby

Stoke on Trent

Kingston upon Hull

Bexley

1 x

1 x

1 x

1 x

1 x

1 x

1 x

1 x

1 x

2 x

2 x

2 x

2 x

2 x

2 x

2 x

2 x

2 x

3 x

3 x

3 x

3 x

3 x

3 x

3 x

3 x

3 x

1.79%

-0.68%

0.78%

1.78%

3.04%

1.93%

2.22%

0.77%

1.48%

£577

£406

£425

£578

£642

£547

£472

£437

£1,012

£512

£353

£344

£490

£515

£411

£401

£358

£826

£598

£387

£417

£627

£669

£561

£447

£435

£1.078

£831

£455

£495

£774

£730

£637

£553

£512

£1,310

SouthEast

NorthEast

NorthWest

SouthWest

East of England

East Midlands

WestMidlands

Yorkshire& Humber

London

Areas with the Lowest Rents in England, by County

with Darwen

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Rent Check is an online tool that allows tenants and landlords to validate movements in their own rents against others in their area in a fast and user-friendly way. The postcode search widget harnesses sophisticated UK wide data from Landbay’s monthly Rental Index, powered by MIAC. The index maps annual and monthly trends in advertised and actual rents, both geo-graphically and by bedroom number, providing unique and sensitive insight into market movements and social mobility. To validate your rent change by area and number of bedrooms, please visit rentcheck.landbay.co.uk

The Landbay Rental Index

The Landbay Rental Index includes unique granular level detail, looking at local trends to the county and London Borough level, including further segmentations by number of bedrooms.

The credibility of any index is highly dependent on the breadth and depth of underlying data used, which is why this rental index utilises data from Zoopla, the British property website. Approximately 100,000 properties are analysed each month to form the index.

The rental values are mix adjusted by property type, number of beds and geography to ensure that any change in the composition of the data over time does not skew the results. The changes in rents are calculated based on matched samples of homogenous or identical data points over time. MIAC employs sophisticated smoothing techniques and interpolation to filter ‘noise’ and optimise the signal from the data.

Landbay and MIAC do not make any declaration regarding the accuracy or completeness of the Rental Index; collectively reserving the right to adjust the methodology and to edit or withdraw any reports or data. Landbay and MIAC shall not be liable for any decisions made or action taken in response to the published data.

About Rent Check & the Landbay Rental Index

rental index report · 2018-07-04 · london scotland wales northern ireland £1,231 £1,879 £732...

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