Rents are rising whatever way you measure them – the argument between the different firms calculating the figures is by how much.
Britain has no official rent index, so the industry relies on figures mainly compiled by two commercial organisations – LSL Property Services and Homelet.
LSL is one of the country’s leading letting agents, running brands like Your Move and Reeds Rains.
Homelet is one of the UK’s most popular landlord insurance brands.
According to figures issued by both, tenants paid record rents in September.
LSL says average rents increased by 1.1% for September, beating the previous record high of £734 set in August.
Homelet pegs the average UK rent at £808 – a 0.2% increase from August.
So why are the figures so different?
As LSL’s figures are based on rents included in 18,000 tenancy agreements and Homelet’s on agreed rents, the results should be similar.
Several factors could make the results differ, including:
• Sample size – The number of rental properties counted as sources can affect the figures as the smaller the sample the less accurate the results
• Location – If the majority of properties for the samples are in London and the South East, then the average rent would likely be higher than an index based on rents in the North East, where rents are lower.
• Customer base – If one set of figures is based predominantly on letting upmarket homes, while the other on cheaper rentals, the average would be pulled in different directions
• Geography – Homelet covers England, Scotland and Wales, while LSL extends to England and Wales
“The index is based on analysis of approximately 18,000 properties across England and Wales from management information. Rental values refer to the actual values achieved for each property when let,” says the LSL explanation of how their figures are worked out.
Homelet gives less detailed information about how their figures are compiled.
Homelet has access to one of the largest volumes of data on agreed rental amounts in the UK, and shows agreed rental amounts rather than advertised rents,” says the firm’s web site.
Like all statistics, both sets of figures can only give a general indication of rents – actual achievable rents for a specific property will vary on a street-by-street level in every town.
The lack of an official rent index is one issue the Office of National Statistics is taking up with the government, with a view of establishing a single index.