Landlords collected £58.1bn in rent across Great Britain last year – the highest amount on record – according to research by Kent Reliance for Intermediaries. The results found that the amount of rent paid across the private rented sector (PRS) climbed by 1.4% compared to a year ago, an increase of around £818m across the country.
The record high has been driven primarily by the rising average rent per property, rather than a significant rise in the number of rental properties across the PRS. Average rents over the period rose by 1.3% to £896 per month. Meanwhile the number of properties in the sector has remained broadly stable, rising at a rate of just 0.2%.
The South West, West Midlands and East Midlands saw the largest total rent payments. Rents paid by tenants in the South West climbed by 3.8% to £4.7bn. Meanwhile rents paid in the East and West Midlands increased by 4.1% to £3.4bn and 3.6% to £3.7bn respectively.
East Midlands saw the average rent per property rise faster than in any other region in Great Britain – 2.3% to £691pcm. Annual increases in average rents were among the highest in the South West (1.7%) and West Midlands (1.6%).
In London, which accounts for more than a third (35%) of total rent paid across Great Britain, landlords collected £20.4bn – an increase of 1%, which was slower than the national average (1.4%). Here, rental inflation was amongst the lowest of any region, increasing by just 0.5% (to £1,723 pcm).
Andy Golding, Chief Executive of OneSavings Bank, which trades under the Kent Reliance for Intermediaries and InterBay Commercial brands in buy to let, comments: “The rise in rents comes from a combination of factors including tightening house supply, government intervention resulting in higher investment costs and landlords facing larger tax bills than ever before. Many landlords have had no choice but to look to rents to help cover some of these costs. At the same time, it is clear that the overall housing market is subdued, with Brexit and geopolitical concerns weighing on pricing and activity”.
“The solution lies in having increased investment in the property sector, not less, and increasing the number of houses available to rent. But before this can happen, we will need to have some stability in policy, as well as a clear direction for wider the economy.”
Total rents paid annually by region
|
Region |
Annual rent paid (£bn) |
Annual increase/decrease* |
|
London |
£20.4 |
1.0% |
|
East of England |
£4.9 |
1.7% |
|
South West |
£4.7 |
3.8% |
|
Yorkshire and The Humber |
£3.5 |
-1.2% |
|
North West |
£3.9 |
-1.8% |
|
Wales |
£1.1 |
1.5% |
|
South East |
£7.7 |
2.4% |
|
North East |
£0.9 |
-0.2% |
|
West Midlands |
£3.7 |
3.6% |
|
East Midlands |
£3.4 |
4.1% |
|
Scotland |
£3.8 |
0.4% |
|
Great Britain |
£58.1 |
1.4% |
*Q1 2018 vs Q1 2019