Rents for housing in England for the first time since 2008

Market conditions, combined with a possible increase in interest rates by the Bank of England , as well as uncertainty caused by the upcoming parliamentary elections will likely cause a small increase in rental rates in 2015 for the housing market in the UK. Simultaneously, there are factors limiting the growth rates. This low level of income and economic indicators, which is likely to be lower next year.

The rents for flats and houses in England increased only slightly over the past 6 years . The company Belvoir Lettings have provided their monitoring data of the market rent of residential property since 2008. In 2008, the average rent was £698 a month, then, in the midst of crisis – in 2009 it fell to £678 per month. The first significant growth occurred in 2014, when by the end of 2014, the rents amounted to £691 per month.

If you look at rents to the English regions, there is considerable variation in prices.

Thus, the average rental rate in East Midlands – £570 per month, the lowest in England, and in London – £1,500 per month. Rents in London rose 20 % over 7 years in South East – 7% , West Midlands 6%

Rents in the UK have traditionally reflects the level of the economy. It is obvious that ROS rents recorded in those regions where significantly improved economic performance and increased employment.

In 2015, many factors that can have a significant impact on the rental market in the UK, and the market of sale.

The unprecedented growth of house prices in London decreased significantly by the end of the year. The reason is overheat of the market, as well as concerns of potential buyers about the introduction of a “mansion tax” . As a result, the market began to turn in the direction of tenants.

The current government of the UK, where the leading role is held by the conservatives, fully supported the housing market by passing laws that stimulate the operation of market mechanisms and healthy competition in the market.

In the case of the ward in the elections in may next year to power the labour party, will introduce the mechanisms of market regulation such as rent control , tax on mansions. The liberal Democrats , in the event of coming to power, promised to increase the tax on capital gains that will undoubtedly have an impact on reducing the level of investment in the upper market sector.

However, none of these measures can affect investors buying property to rent is, “buy to let”. Over the last 10 years the incomes of such investors has increased significantly and profitability in this market will continue to grow in the coming years, primarily due to continued low interest rates. Accordingly, those who do focus on this market now, will definitely have the advantage in a few years.

® Maxim Savitsky. 24.12.2014

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