Rental income has grown below the rate of inflation over the past year according to an index from LSL Property Services. On average, rents are just 1.8% higher than this time last year, versus a rate of inflation of 2.8%. Indeed, monthly rents have gone up by an average of just £1 since May, an increase of 0.2% for a time period which has typically seen an increase of 0.9% since 2008. This goes hand-in-hand with the recovery of the housing market as those purchasing buy-to-let are causing supply of private rented property to increase slightly, while those purchasing owner-occupier homes, often as first-time buyers, are putting dents into demand.
This all comes at a time when laments about high rents have never been louder. Certainly the figures tell us nothing of the long-term picture from the last 20 years, and in many areas rents are very high. But it must not be forgotten that landlord costs are also high and, obviously, increasing. And these figures suggest that landlords are doing their best to keep rents fair as this happens.
The steady rent levels may also hint at a greater number of steady, long-term tenancies under which landlords prefer to keep a good tenant who provides a predictable and regular income from a relatively low rent rather than to push for the highest rent possible and regular increases. Indeed, the importance of longevity of tenancy to the vast majority of landlords is something Rentify has seen in our own research. Let’s hope the media at large also start to come to the same conclusions about landlords and we see a move away from the frequent implications that all landlords care about is squeezing an extra few pounds from anyone willing to pay it!