Economic Uncertainty Boosts Rental Home Demand
Economic and political uncertainty is boosting demand for rental properties, one index reveals.
According to HomeLet, the private rental sector is offering greater security and certainty for those who are looking to move home.
They point out that a fixed rent over a fixed term will help tenants to manage their finances and plan their lives during a period of uncertainty.
The HomeLet index reveals there's been a sharp rise in tenant demand which has led to the average rent growing by 2.5% over the year.
New lets being agreed by agents and landlord
The data is based on the new lets being agreed by agents and landlords that use its referencing service.
The data highlights that London rents are still the most expensive, with an average cost of £1,580 per month, a rise of 3.7% on last year.
The average rent outside of the capital is now £775 per month, a rise of 2%.
The best rent performance was enjoyed by landlords in the south-west, where rents grew at 5.1% in the year to January 2019. Rents there are now an average of £859 per month.
A spokesman said: "While economic and political uncertainty may be slowing down house sales, the extra strain on the lettings market has seen strong growth in rental costs.
"London is driving price growth and the inadequate housing supply is being stretched."
He added growing numbers are refraining from a house purchase and are instead choosing to remain in the rental sector, but the government's 'crusades against the BTL market' in recent months means there are fewer suitable properties available.
London's prime rents rise
Meanwhile, another index highlights that rents in prime London locations grew by 1.9% in the fourth quarter of last year.
The LonRes Prime London Lettings Index also highlights that growing demand from tenants worried about political uncertainty is pushing up rents.
They point to a large housing supply imbalance with a shortage of studios and one bedroom flats in most areas.
They say that over the course of 2018, 13% fewer rental properties reached the market.
The firm's head of research, Marcus Dixon, said: "The response of both sellers and buyers in prime London, in an uncertain market, has been to hunker down and to observe rather than participate."
He said this is boosting the prime rental market with would-be buyers opting to become tenants with growing competition for falling rental stock levels.