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The North/South UK Rental Divide

Tuesday, 4th March 2014

Categories: Property Prices Sales

Author: Kris White

The January 2014 HomeLet Rental Index Survey reveals that it is 69% more expensive to rent a property in the South and South West of England, than it is in other areas around the UK. This figure compares to 37% in 2008, meaning that it’s now nearly twice as expensive to rent down south. Whilst people who are already established in the southern parts of the UK will be accustomed to the higher rental prices, these figures demonstrate just how financially difficult it must be for anyone to relocate here.

The rental market shows no sign of taking the financial slack from the sales market – in fact, the opposite seems to be the case: although the intent remains high for property sales, the number of potential buyers still far outstrips the number of available properties. Many would-be homeowners have to stay in rental accommodation in order to be able to live in their preferred area, or simply due to missing out on house purchases. This is backed up by the research, which also revealed that the average age of tenants has increased to 34, and the average tenancy length has increased by 6% to 21.4 months.

This dual demand across both the sales and rental markets means prices for both will inevitably remain buoyant and landlords are able to take advantage of increased rental values. However, it’s important to also take into account the fact that wages for many tenants will also have increased during this time. With more people renting for longer, income accruements that would have previously more likely been used to purchase a property, are now servicing slightly higher rents instead.

The good news for tenants is that the predictions for rental prices are fairly steady over the next few years and there shouldn’t be a massive hike in rents, the like of which we have experienced recently. Although it almost certainly isn’t always the case, a rental increase should be reflected in the overall state of the property, and if landlords are hoping to charge more for their properties, tenants who are prepared to pay more will expect to be rewarded with a well-maintained flat or house.