Rents rise by 10.2% in the East of England
The following article was sent out by an estate Agent (David Burr) and although it shows the opportunities for rental investment it also highlights the growing pressure on tenants.
‘The index also shows that tenant finances worsened with 7.6 per cent of all rent in arrears in February 2015, compared with 6.9 per cent a year ago’.
The Workers of England Union campaigns against inner city poverty and the rising cost of renting are directly linked to this. We were also thankful that the article looked at England as whole and as a country, showing that each area experiences different pressures on the local workforce.
David Burr
Rents rise by 10.2% in the East of England
London saw the second highest rise with rents 4.9 per cent above levels in February 2014.
The Buy-to-Let index shows the average rent across England and Wales is 3.1 per cent higher than February last year. The average residential rents in England and Wales now stand at £766 per month, compared with £763 in January 2015 and £743 in February last year. In the east of England, rents have gone up to £787 in February 2015 compared with £714 a year ago.
With growth gathering around, renters are moving to areas that allow them to commute into the capital and rents are rising in line with the salaries of these new tenants.
The north west (-0.3 per cent) and north east (-0.4 per cent) were the only regions to see a year-on-year drop in rents, while prices in the West Midlands and south west remained stable compared to last year.
Meanwhile, the gross rental yields in England and Wales have dropped by 0.2 percentage points from February 2014 and currently stand at 5 per cent as of February 2015, according to the index.
Yields have steadied near the 5.0 per cent mark and there is a reciprocal stability in total annual return as property prices stabilise.
The index also shows that tenant finances worsened with 7.6 per cent of all rent in arrears in February 2015, compared with 6.9 per cent a year ago.
One of the reasons rents have been rising year-on-year to the extent that in London rents are up 20% in the last seven years, according to some reports, is because there are so few properties on the market.
However, the effects of pension reforms are likely to hit the market. The government scrapped compulsory annuities for pensioners in last year’s Budget, so there’s been lots of talk about people cashing in their pensions to invest in the property market. This could boost buy-to-let supply and perhaps push rents down.
Prospects for the rental market look good for the next 12 months and beyond, despite the dark clouds of political uncertainty in the form of the general election in May hanging over the property sector. All the economic indicators point to property remaining a good medium and long-term investment, particularly if you have an agency to help you with all of the daily headaches and guarantee your rental income.