Average UK Rental Prices Fall

Tuesday, September 22, 2015

Average UK PRS Rental Prices Fall

Average UK PRS Rental Prices Fall

Average Rental Prices Drop As Yields Remain Steady

New data published by Your Move and Reeds Rains shows that average monthly rental prices in England and Wales have fallen on a monthly basis for the first time since March 2015, with the average national monthly rental price down by 0.1% in August, dropping from £804 to £803 (GBP).

Overall, annual rental price growth has slowed more significantly from the all-time high of 6.8% recorded in July to just 5.5% in August.

However, despite the national slowdown, letting agents are reporting that rental prices in some UK regions have continued to reach new highs during the month of August, with average rents in the East and West Midlands regions reaching £596 (GBP) and £586 (GBP) respectively, representing new record rental prices.

The data published by the letting agent group does not reveal the extent of tenant rent arrears and the affect they have on PRS income, but it does show that that average rental prices in the East of England are rising at faster rate than London (10.2%) rising at an annual rate of 11.5%, which could cause a multitude of financial problems for struggling tenants.

Smart landlords are being more pro-active in their approach to safeguarding rental income with record numbers using specialist products such as Rent Protection insurance to guarantee continued rental income from tenants.The published data also shows that total annual returns, incorporating both capital accumulation and rental yields, have stabilised and that average gross yields from rental property remain steady at 5.1% during August 2015, slightly higher than the 5.0% recorded in August 2014

UK landlords saw average returns of 9.3% over the year to August 2015, the same as July 2015 but down from 13.4% in August 2014.

UK PRS landlords should have seen an average return of around £16,856 (GBP) in absolute terms from rental property, before deductions such as rental property repairs, maintenance and mortgage repayments. Of this, the average capital gain contributed £8,323 (GBP) while secured rental income made up £8,533 (GBP) over the year ending August 2015.

Director of Reeds Rains and Your Move, Adrian Gill, commented on the findings, stating;“When purchase values cool, rental yields tend to assist in a soft landing for total returns, and this has been the case over the last six months or so. However, the picture in the purchase market is now an optimistic one, and may boost landlords’ prospects further this year. With mortgage rates still likely to remain low for some time, the outlook for the property market as a whole is positive – and the opportunities for landlords to get involved are excellent.”

Private rental sector landlords can find a wide range of specialist products and services on offer from the UK’s leading suppliers to the UK lettings industry, Legal 4 Landlords, who can provide a number of necessary products needed to maintain a profitable rental property business, including Rent Protection insurance, Tenant Liability insurance and even Tenant Eviction services.

This was written by Mike Clarke. Posted on at 10:30 am. Filed under Insurance. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.