Rents in England Increased Year-on-Year Official Statistics Show
The latest figures from the Office of National Statistics (ONS) show that rents in England grew by 2% in the year to April 2017.
This correlates with an overall rise from January 2011 where rental prices across the whole of the UK have increased by an impressive 14.6%!
Despite additional pressures on the buy-to-let sector in recent years, investors should be buoyed by these rental statistics. This is especially the case if you can obtain properties in buy-to-let hotspots around the country – something we have been quick to recognise here at Aspen Woolf.
Why are Rents Increasing?
Rents have consistently risen because traditional first-time buyers cannot afford to purchase their own home. Combine this with a chronic lack of housing and you have millions of people increasingly reliant on the private rental sector, and not just for the short-term either.
These findings are backed up by the latest English Housing Survey. It shows the private rental sector has doubled in size since 2004, with almost half of those aged between 25 and 34 paying a landlord for their accommodation. Around a decade ago, this figure was below a quarter.
What this ultimately means is that monthly rates will increase. Landlords are assured of enquiries as potential tenants have no real alternative, even as rents continue to rise each year.
Looking at things from the landlord’s point of view also helps explain this pattern of growth. Of course, no investor wants to disappoint their tenant by raising prices, but the choice is sometimes taken out of your hands.
If the level of inflation or cost of living rises – as it has done in the UK since 2015 – it makes sense to increase your rental income to cope, especially as other landlords are likely to be doing the same.
As noted, it’s not good practice to burden your tenants with an expensive hike in their rent in one go. A gradual increase over a few years is more beneficial, hence the long-term positive trend across the UK as a whole.
Looking further at the ONS report, it illustrates that even by removing excessive London rents from the equation there’s still a 10.5% rise after 2011. The rest of England outpaced both Wales and Scotland comfortably.
The South West performed impressively, with rents up 2.5% from March this year, whilst the North West also saw a rise of 1.4% over the same period. Aspen Woolf have sourced properties from Plymouth and Liverpool due to these rental increases and positive forecasts.
There’s no sign of these trends slowing down either, especially as more and more people are being pushed into the rental sector. According to property agent Savills, rents (+19%) across England are set to rise considerably faster than house prices (+13%) between now and 2021.
You can find out more about our investment opportunities in Plymouth and Liverpool over on our UK investment page.
If you would like to know more about these areas, you may be interested in 5 Reasons Why Now is the Time to Invest in Plymouth and Three Reasons Why North Liverpool is a Great Place to Invest.