The October 2013 report shows the average cost of renting a home in the UK currently stands at £815 per month after decreasing by 4.6% during October. However, despite the monthly drop, tenants are still paying an average of 2.7% more than the same time last year.
When comparing previous years, this month's HomeLet Rental Index data Index shows from October 2010-2013, average UK rents increased less each year, after rising by 4.8% in 2011, 3.1% in 2012 and 2.7% in 2013. This is also true in the capital, where the rate of increase in average rents slowed down by 2.3% between October 2011-12 and 4% between October 2012-13.
Half of the UK's regions saw annual decreases in average rental amounts. Of the other six, only three saw rental amounts rise by more than 2%. Therefore the October UK annual increase (of 2.7%) has been driven by the East Midlands, Greater London and the North West, where average rents rose by 3.2%, 2.6% and 2.1% respectively.
Apart from Greater London, the North West is the only region to see three consecutive annual increases in average rental amounts. Despite the three increases, average rents in the North West are only 4.5% more expensive than they were in October 2010. In contrast, rents in Greater London are currently 20.6% higher than they were three years ago.
Gary Abraham, HomeLet's sales and marketing director, said: "Our new figures could suggest the effect of the economic downturn in 2008/09 is beginning to reduce. Government investment in schemes, such as Help to Buy, also appears to be helping to alleviate the recent so-called 'housing crisis'. There's certainly more confidence within the housing market at the moment and an increasing amount of first-time-buyers are now purchasing their own properties as a result of increased lending and mortgage availability.
"Recent reports suggest the Build to Rent scheme will improve the private rented sector by boosting the supply of buy-to-let homes within the market. Properties rented with longer-term tenancies as part of this scheme aim to not only offer additional security to tenants and their families, but also curb spiralling rents recorded over the past few years.
"What needs to be considered as part of these improvements though is who our tenants are. This month's HomeLet Rental Index data shows half of the UK's regions saw an increase in the percentage of retired people moving into a new rented home over the past 12 months. There's also been a 7% increase in the percentage of tenants aged 66-70 moving into a new rented property who used to own their own home over the same time period.
"It appears the demographic of the UK tenant is changing. While initiatives, such as the Build to Rent scheme, are positive moves to alleviate supply, the Government needs to consider these purpose-built properties are not going to be suitable for all tenants. Therefore, focus must also be kept on the maintenance of existing properties, so all tenants are able to live in suitable properties depending on their individual needs.
"The influx of people renting a home over the past few years caused the high demand, lack of supply and resulting increases in rental amounts. However, with more options available to potential buyers and tenants, it appears rental prices are beginning to stabilise. Momentum must be maintained though so those living within the private rented sector are offered the best quality properties and security needed as part of their tenancy agreements."