The UK’s largest tenant referencing firm, HomeLet, have released their Rental Index Figures for May 2018, which show a further increase in UK rents.
HomeLet reference 500,000 tenants every year, and the HomeLet Rental Index provides the most comprehensive and up-to-date data on rental values in the UK.
Average Monthly Rents Increased
The average monthly rent within the UK is now £919, a 2% increase on last year. Londoners are seeing the highest rent rises, with average rents up by 5.6% on last year, but even when London rents are excluded, the average UK rent is £763, showing an increase of 1.3%. 11 of the 12 reported regions had seen average rents rise for new tenancy agreements.
Salaries not keeping pace with rent increases
However, it seems that salaries are not keeping pace with wages. In 2017, tenants would expect to spend 28.9% of their wages on rent – this year, this has risen to 31.9%, and in every region of the UK this percentage is higher than last year.
Londoners pay 72.6% more than anywhere else in the UK
Research continues to show that Londoners spend more on rent than any other region in the UK, and this figure is growing, with average rents in the Greater London area now reaching a whopping £1502.
While London salaries are generally higher, so are property prices, meaning many cannot easily save the deposit required to buy. Londoners spend 37.1% of their income on rent, whereas in the North East, this figure falls to only 24.5%.
Westminster, Camden and the City of London command the highest rents in the UK, with average rents there now reaching £2,227 and £2,224 respectively.
Cheapest place to rent in the UK?
According to HomeLet, the North East is the cheapest place to rent in the UK, with average rent prices of just £533 and a rent to income ratio of just 24.5%. The area covers Northumberland, County Durham, Tyne & Wear & Cleveland.
What can I get for my money in London -vs- the North East?
For just over the average monthly rental in Bishop Auckland, County Durham you could rent a modern 4 bed terraced house, listed at £550 per month. The property has 4 bedrooms, 1 reception room, 2 bathrooms, gas central heating, upvc double glazing and private parking.
For just over the average monthly rental in Paddington, London, you could rent a 1 bedroom luxury apartment listed at £2,232 per month. The property has one bedroom and one bathroom, but benefits from a private balcony and a 24 hour concierge service.
Of course, taking your London rent to the North East would net you a mansion, with 6 or 7 bedrooms and in many cases land too, for the price of a 1 bedroomed flat in prestigious Westminster.
Managing Director of leading Estate Agents Software specialists AgentPro Gareth John says regional variance is nothing new:
“For as far back as I can remember, London rents have traditionally been higher. Although wages in the region are higher too, it is clear to see that living outside of London offers more disposable income. We work with estate agents and letting agents throughout the UK and the difference between the highest and lowest rental priced properties that our clients list on the property portals is massive! It’s just the way it always has been, across the world, it simply costs more to live in capital cities.”