Arenda fee real estate in England is growing excess of demand over supply

Rents in the sector of residential property in England and Wales decreased in August 2015 in most regions for the first time in March of 2015 , despite the fact that in the three regions broken record growth in rents. In fact, the rent reduction is negligible – a mere 1 pound, or 0.1% from £804 in July 2015 to £803 in August 2015. This decline seems even more insignificant when you consider that for the year rental prices rose by 5.5% compared to August 2014. August lull 2015 happened after continuous acceleration of rents which followed for 12 months. Rising rents observed on the background of sustained improvement in economic performance.

Despite the small the August slowdown in prices, the fundamental factors influencing the market of residential property in England and Wales has remained the same – the demand for rentals continues to outstrip supply in the short term, there is no reason to assume that the problem of housing shortage will be solved. Consequently, the rental prices of residential property in the UK will continue to grow.

Three regions of England and Wales saw a sharp increase in the price of rental housing. This is the West Midlands with an average rent of £586 per month East Midlands with rents of £596 per month and East of England, where for a year the rent increased by 11.5% and reached an average value of £843 per month. The rate of growth in property prices in the Eastern part of England surpassed even London, where for a year of rents on real estate increased by 10.2%.

However, London remains the region with the highest average rents of £1278 per month. The region that saw falling rental prices, was the Wales – in Wales, even on an annual basis, there is a decline of 3.1%.

The landlord, having invested in residential property in the UK, has an income of 9.3%, or £16856 in absolute value, before deductions for maintenance payments and mortgage loans. Of them – £8323 is capital gains, and £8533 is the rent we pay. If the base rate of the Bank of England will remain at the same level, the projections for homeowners and investors “buy to let” is very optimistic. But not all the increase in rent on a property in England will be good news. If the trend of growth will remain for a long time, it is very likely the growth of debt among tenants. The real estate market of England is vital to increase the number of projects under construction. This will attract more investments from homeowners and will not allow rental prices to rise for a long time.

® Helen Entree. 21.09.2016 G.