Buy to Let Rent Growth Soars to Six-Year Record

Rent rises for new tenants are accelerating as inflation stokes the economy.

Tenants are paying more across the country as the cost of housing increases at the steepest rate since January 2016.

In April 2022, rents were up 2.7 per cent year-on-year and added an extra 0.3 per cent from the 2.4 per cent annual rise recorded in March.

By country, annual rents were up 2.5 per cent in England, 2.9 per cent in Scotland and 1.7 per cent in Wales.

London saw the lowest annual rent growth (1.1 per cent), while landlords in the East Midlands saw the highest (4.0 per cent), according to data from the Office for National Statistics (ONS).

How private rents have changed in the year to April 2022

“Private rental price growth in the UK increased during the latter part of 2021, with widespread annual growth across all regions except for London. This growth has continued to increase in recent months, with an increase in rental price growth in London since the start of 2022,” said the ONS Private Housing Rental Prices Index.

“In the 12 months to April 2022, rental prices for the UK, excluding London, increased by 3.4 per cent; this is up from an increase of 3.3 per cent in March 2022. London private rental prices increased by 1.1 per cent in the 12 months to April 2022, up from an increase of 0.4 per cent in March 2022; this was the strongest annual growth in London since November 2020.

“London’s rental price growth in April 2022 (1.1 per cent) remains the lowest of any of the English regions, despite a significant pick up in recent months. This may be a continued reflection of a decrease in demand because of the coronavirus pandemic; for example, remote working has shifted housing preferences to mean workers no longer need to be close to offices.”

Buy to let rents by region

Although the East Midlands saw the highest annual rent growth in April, more than half the English regions saw rents rise by 3 per cent or more, and every area posted a rise of 2.5 per cent or more except the capital.

London buy to let rents bounce back

Buy to let rents in London soared by more than 14 per cent in the past year as tenants rushed to find a home in the capital, says rent analysis by tenant referencing company Homelet.

CEO Andy Hnlstead said: “London has well and truly bounced back from a lull during the height of the pandemic, with a strong performance in the capital continued by another price rise.

“A broader analysis of the rental index data confirms that the demand for rental properties is continuing to outweigh supply massively, which will surely lead to continued price rises to differing extents across the country.

“The cost-of-living crisis has been widely publicised, and it is inevitable that energy price rises and extra expense in other areas will mean that it will become harder and harder for tenants to pay their rent every month.

How rents have changed where you are

RegionApr-22Apr-21Annual changeMar-22Monthly change
Greater London£1,804£1,58014.2%£1,7701.9%
North West£878£79111.0%£8710.8%
South West£1,035£9558.4%£1,0171.8%
Yorkshire & Humberside£749£6938.1%£7430.8%
West Midlands£813£7557.7%£8041.1%
North East£594£5557.0%£5890.8%
East Midlands£755£7096.5%£7490.8%
East Of England£1,055£9936.2%£1,0441.1%
South East£1,164£1,1025.6%£1,1481.4%
UK excluding Greater London£920£8537.9%£9101.1%

Source: Homelet

Guild of Landlords Rent Digest – FAQ

For landlords confused by the stats and what they mean, here are answers to the most asked questions about rents.

Why do the rent indices show different results?

Check the data carefully. Other indices cover different periods, and the samples vary between reports.

The ONS has the most extensive sample, so the most reliable figures should return, but the time to collect and analyse the statistics often means the ONS data lags behind the rest of the sector.

ARLA derives insights from letting agents and provides what's known in the trade as a sentiment survey rather than factual data.

 Homelet statistics come from customer data, which may not fully reflect the market.

Should landlords raise rents in line with the stats?

That's a business decision for landlords. The rent statistics indicate how the market moves but do not reflect demand from tenants and property standards in local neighbourhoods.

Don't forget the data is historical, giving a picture of what's happened rather than what will happen.

Which rent index is the best?

That's up to individual landlords. For instance, one index with a solid customer base in the same area as a landlord's portfolio may align more closely with market rents for that neighbourhood.

Average data is not good if you don't have an average home, and median rents will cover everything from a room in a shared house to a four-bedroom home.

Extra research with local letting agents is likely to indicate better where a landlord should pitch a competitive rent and stop them from underselling.

How has coronavirus disrupted the statistics?

Although several letting agents and property organisations publish regular rent statistics, many have been affected by the coronavirus lockdown that has their reports suspended or delayed.

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