One in four letting agents in the UK have seen private sector rents rise at the beginning of 2015, according to the first of a new monthly report from the Association of Residential Letting Agents (ARLA).
The index tracks key market trends within the private rented sector and also found that London has the highest demand for rental property in the UK and on average it takes five viewings for a property to be let.
The January report, which was conducted among ARLA members, reveals that on average 27% of licenced branches saw an increase in the cost of monthly rent for tenants from December 2014 to January 2015.
The East of England, which includes Bedford, Cambridge and Norwich, saw the highest number of landlords increasing rent per calendar month, with 35% of ARLA letting agents reporting an increase in the New Year. Welsh agents on the other hand only saw 11% of landlords increasing monthly rent, leaving less tenants facing rising costs.
‘The new ARLA Private Rented Sector Report is designed to gain invaluable insight on the lettings market month to month from ARLA member agents,’ said David Cox, managing director of ARLA.
‘With house prices still high, along with stricter lending criteria for mortgages, the rental market is currently a much more accessible and affordable option to buying. Due to this, the demand for rental property is increasing, which impacts the cost of renting and people are willing to pay more to secure their desired property. If house prices continue to rise in 2015, we expect this trend to continue in the rental sector,’ he explained.
Despite rising rent costs, on average, ARLA letting agents reported it takes around five viewings for a property to be taken off the market. Whilst rent increased the most in the East of England, ARLA letting agents revealed it also only takes an average of three viewings for a property to be let in the region. This is less than half the viewings it takes for properties in London, which take an average of seven viewings.
‘With rental properties in the East of England being quickly snapped up off the market, people don’t appear to be put off by the rising cost of rent in the region. Clearly property in the area is popular and this will be an interesting trend to watch,’ said Cox.
ARLA licensed agents reported an average of 38 prospective tenants registered per branch in January. Unsurprisingly this was the highest in London, with an average 45 registered prospective tenants per branch.
However, it seems that unlike the sales market, there is more supply in the rental market. The average number of managed rental properties per branch was 184. The highest was recorded in East Midlands at an average of 266 per branch, while the lowest was recorded in London at 140 on average per branch.
‘London has the highest demand for rental property on average per branch, yet supply in the area is the lowest out of any UK region. Many Londoners simply cannot afford to buy and therefore look to the private rented sector instead. This means available property is highly sought after, and it highlights the issue of supply and demand; particularly in the Capital but also throughout the UK,’ Cox concluded.