With the Covid-19 pandemic ushering in a ‘work from home’ era in 2020, the demand for rental homes increased substantially across the UK. As working professionals moved away from London to homes with better communal spaces, gardens, balconies and open areas, rental values grew significantly in regions, such as East of England and the South West.
According to the HomeLet Rental Index for December 2020, the annual variation in the average rental values in South West was 10 per cent while in the East of England, it was 7.7 per cent. Average rent in the South West was £924 while in the East of England it was even higher at £983. The rent in East of England was higher than the average rent in the UK (£979, up 2.7 per cent on last year).
Nine of the 12 regions monitored showed an increase in rental values between December 2019 and December 2020. It is evident that people are preferring homes in leading commuter towns of London, especially in Bedfordshire and Essex. This demonstrates the rising potential of Bedfordshire and Essex as rental hotspots.
Several London-based developers have already forayed into commuter towns in Bedfordshire and Essex to build award-winning mixed-use developments that offer a lifestyle that is on par with London. Incidentally, the prices of apartments in these developments are achievable to all buyer groups, including first-time buyers.
Strawberry Star’s multiple award-winning development Lu2on is coming up in Luton, the number one searched property hub for first-time buyers in the UK last year. Phase 1 of Lu2on is on schedule for completion by the end of 2021. Likewise, the company is coming up with Harlow Quarter, another award-winning development in Harlow Town Centre.
Both developments make an excellent investment proposition, from rental income as well as capital gains perspectives. With ‘work from home’ continuing to remain in vogue, the rental value will only go up in the commuter towns.
Andy Halstead, chief executive at HomeLet & Let Alliance, said: “At a national level, the latest data shows a continuation of the trends we’ve seen emerging since the national lockdown ended, with rents for new tenancies increasing across the UK. In the South West, average rents are now £83 per month higher than the same time last year. The upward pressure on the regions around the capital, particularly commuter towns, is coming from a broad range of tenants looking for more space, both inside and outside the property. The trends we’ve seen in the past 12 months highlight the responsiveness of the private rented sector, and the crucial role it plays in supporting the changing needs of a significant proportion of households in the UK.”