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Market Update

August 5th 2014
By: Jon
Market Update

In many parts of the country, the average cost of renting a home continues to increase.  Nevertheless, there are still enough tenants with high enough incomes to sustain the rises.
 
The May 2014 HomeLet Rental Index is showing that tenants who signed an agreement in May 2014, had an income which was 7.2% more than the average tenant 12 months before.  This index is the largest survey of private tenants in the UK.  Incomes have risen faster than rents in three quarters of the UK regions.  The average rent in the UK is now £846 per calendar month.
 
In May 2014, the average rent in Greater London was £1348 which is £116 higher than the comparable month in 2013 when it was just £1232.  London’s rental prices are increasing faster than the rest of the UK in line with its house prices.
 
Landlords are reassured by this news as there seems to be a steady supply of new tenants who have higher incomes.  According to the Office for National Statistics, UK average incomes are rising by 1.7% per year.  New tenants who are coming into the market do have incomes to pay higher rents, possibly because of higher house prices and stringent mortgage finance checks.
 
“The rental market is in good shape, while rents are rising, there is no shortage of tenants who are able to pay them.  I believe the return for investors in rental property is secure,” says Bernadette Keating, Lettings Director at Goodfellows.  She goes on to say that “this is good news for both tenants and landlords.  Investors will continue to be attracted to the returns available in this sector providing they are reassured of the tenants’ ability to pay. We expect the demand for rental property to continue in this way for the foreseeable future.”