Thursday, 29 January 2015

London rents more than twice national average

The average London rent is now 102 per cent more than the national average, according to analysis released today.

According to BM Solutions, the average rent in the capital is now £1,417 per month whereas the national average is £701.

The national average rent increased by £27, from £674 in 2012 to £701 in 2013. The rise in the average London rent was £135 over the same period.

There was a clear north-south split, with renters in the south east having the second-highest average rent at £913 per month and renters in the north paying around £501 per month.

Wales recorded the largest percentage rise of 10.6 per cent, bringing its average monthly rent to £51, closely followed by London at 10.5 per cent, and Yorkshire and the Humber with a rise of 7 per cent.

The research found that buy-to-let investors’ rental income grew on average by 4 per cent.

Phil Rickards, head of BM Solutions, said: ‘Demand for rental accommodation remains strong, and in many regions this is outstripping supply which can lead to an upward pressure on rent prices.

‘However our figures show that even with increasing rents, the average yield that investors are getting has remained static, which will be driven by the fact that the average price of a typical buy-to-let property has grown marginally faster that average rents.’  

Buy-to-let purchases grew by 28 per cent to 46,430 in 2013, up from 36,400 in 2012.


RegionsAnnual Rental Yield1 H2 2012

Annual Rental Yield1 H2

2013

Average Monthly Rent1 (£) – H2

2012

Average Monthly Rent1 (£) – H2

2012

Increase in average monthly rents

H2 2012-

H2 2013

 

East Anglia5.0%5.3%              640       639-0.1%
East Midlands5.9%5.9%              524       5413.3%
Greater London5.0%4.8%           1,282    1,41710.5%
North7.0%6.6%              482       5014.0%
North West6.7%6.3%              526       5382.3%
Scotland6.6%6.2%              561       5681.3%
South East5.0%5.2%              902       9131.2%
South West5.3%5.1%              757       749-1.1%
Wales6.3%6.2%              479       53010.6%
West Midlands5.9%5.7%              571       563-1.4%
Yorkshire & Humber6.3%6.6%              492       5277.0%
GB5.6%5.5%              674       7014.0%

Source: BM Solutions

 

 

Readers' comments (9)

  • Chris

    I think the report that showed landlords in London make five times the profit of others is the real story.

    It is way past time to regulate rents. Ending profiteering by landlords would be good for the national economy, good for taxpayers and good for tenants without too much harm to landlords. The problem is that one in three MPs are landlords. No way will these self interested money grabbing careerists switch off the rent stream, no matter how much it would be in the national interest. They truly are all in it together!

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  • Brian C Kent

    Chris is absolutely correct.

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  • And "affordable rent" is no answer. How many times must we repeat "we desperately need low rent social housing", before anyone in government listens?

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  • London property prices are also more than double the average for the rest of the country excluding London.

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  • A list of average salaries in the respective regions would be more informative.

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  • Chris "I think the report that showed landlords in London make five times the profit of others is the real story"

    Chris you have got it all wrong.... lots of people don't understand the term profit.

    On the figures for 2012, Landlords in London the smallest yeild from renting at 5%. Landlords in the North make highest yield at 7%.

    A 5% return is very low. The banks are paying 2-3% interest. That is without taking a risk or having to fix the roof.

    (Nationwide Building Society offers 5% for one of their current accounts).

    A London Landlord would need to have 20 properties, to make the same level of return as a Landlord in the North with 14.2 properties.

    The point that is been missed, in London the rents are high, but the property cost is corresponding higher. It does not necessary mean the profit is higher.

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  • Chris

    Nice try Concerned Landlord.

    Profit: money that is earned in trade or business, after paying the costs of producing and selling goods and services.

    Yield: the amount of positive product, return on investment, apportioning for costs.



    Is a 5% yield on a £400,000 property in London a lower value than a 7% yield on a £80,000 property in Bolton, no it is not, the London value is many times higher (although the investment is also higher.) - I think you are misleading the argument Concerned Landlord.

    The profit - that is not the yield, which is why it has its own word - is 5 times higher for London Landlords.

    That is as absolute a fact as there being 1 in 3 MPs who are private landlords.

    If an MP owning a helicopter manufacturer lobbied for government spending for its product he would be justly slapped on the wrists, yet MPs have created a whole private rented market from which they gain £billions in taxpayer funding and they shake each other by the hand, slap each other on the back, and legislate for new ways to increase their personal gain. This makes the expenses scandal seem like a minor dinner in Cameron's flat.

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  • This argument is just about relative versus absolute profit.

    Clearly in the north even with higher yields you need a lot of properties to get same absolute profit.

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  • Well said Chris!

    How come the rent's are that much higher in London - but benefit payments are the same nationwide?

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