How is the rental market in the UK

For the first time since 2011 every region of England and Wales recorded growth in rents of residential property – these are the new data, published today, 17 may 2013 LSL Property Services Acadametrics

Average rents increased in England and Wales by 0.2% in April 2013 and they are now 3.9% higher than a year ago, reports LSL Property Services .

If the current trends in rental prices residential property in the UK, landlords should expect an average annual income of £9496 for one property over the next 12 months.

Rent for housing in London breaks records, reaching an average value of £1110 per month and are now 7.6 percent higher than a year ago. Takes place the annual growth in Wales to 5% in East Midlans 4.1%. The only region which saw a decline of rental rates – South-West, where there was a slight drop in March, but the loss came back in April, when rents rose 0.5%.

Monthly data showed that eight out of ten regions saw growth rates for the rental of residential property in the UK. The most significant this increase was over the past month in the East Midlans 0.6% compared to the previous month, followed by the North-East and South-West, where rental prices rose 0.5 %. Wales and North-West – the two regions where rents fell in Wales by 0.3% in the North West, by 0.2%.

Although rents everywhere are higher than a year ago, wage growth is at its slowest pace in recent years. Not to mention this fact: despite the fact that all regions recorded growth in rents year on year, the divergence between London and other regions increased. This imbalance is particularly acute in regions where traditionally weak is the labor market. For example, increased rates of 5% will be felt by the people of Wales very sharply.

If you look in details the reasons of growth of cost of rent for residential property in the UK, it should be noted that, despite the increase in inventories of real estate intended for lease since 2008 at 10%, due to the small number of new buildings and increased demand, there was a compression of the rental market.

Total annual rental income from rental housing rose by April for the last 12 months, to 5.9%. And the average rental yield for the year was 5.3% in April, compared with 5.2 % in April 2012.

Further increase in rental residential real estate sector of the UK will depend on how will be able to improve the availability of financing for potential owners. The number of purchases for rental “Buy to let” decreased in the first quarter, as housing prices began steadily to move forward.

The increase in rates for rent a double-edged sword – something that is good for investors and property owners, bear more heavy financial burden on tenants. Given that optimism about improvement in the economy for the most part imposed by the media than is present in the minds and moods of people, I must admit that wage growth in the country is seriously lagging behind expectations.

In this situation, homeowners nothing more to do but to be patient and to expect a real improvement in the economic indicators that will give a boost to all spheres of life, including improve the financial capabilities of tenants.

® Maxim Savitsky. 17.05.2013