Residential rents in London increased by 3.7 per cent annually in March 2020; the average rent in the capital now stands at £1,673, according to the latest market statistics. This growth was registered during the initial days of Covid-19 spreading across the UK.
Nevertheless, the rental market in the UK is expanding, in part, due to factors such as affordability and lifestyle choices in the modern day; with renting now preferred to buying. Moreover, standards in the rental sector have dramatically improved. As such, the average age of renters is increasingly higher. This style of living enables less commitment, more flexibility for tenants, and represents excellent opportunities for earning greater buy-to-let investor yields.
According to the March 2020 HomeLet Rental Index, average rental values in London (£1,673) were 75 per cent higher than the UK (£959) n March. When London is excluded the average rent in the UK was £793 in March 2020; average rents in London were 111 per cent higher than the rest of the UK.
Average rents across the UK rose by 1.8 per cent in March 2020 when compared to the same month a year previously; the average monthly rent is now £959 (including London). This reflects an increase - relative to the growth experienced in February 2020 (of 1.4 per cent) and in January 2020 (1.5 per cent), according to ONS data on private rental prices paid by UK tenants.
The rental growth recorded in the UK appears to be higher than the rate of inflation, recorded at 1.7% in the Consumer Prices Index (CPI) in February 2020. Buy to Let investors continue to benefit on this front as well as from ongoing trends outlined by ARLA (The Association of Residential Letting Agents). As an example, in January 2020 ARLA reported that demand from prospective tenants increased to the highest level on record, with the supply of rental stock falling to the lowest seen in seven months.
The latest data also shows that rents in the North West however, are growing faster than any other region in the UK, rental growth in London has now decreased by over for the past three months. Rental values in the North East, North West, East Midlands, Scotland, Yorkshire & Humberside, Northern Ireland and Wales all rose at a rate faster than the UK average.