Tenant demand reflected in a year of rising rents
The latest DPS Rent Index shows that average rents have increased in the UK by 6.13% in the last 12 months, now standing at £849, up from £800.
Across the UK, the picture is one of strong rental growth, with all regions registering an increase in average rents, and 10 of the 12 regions experiencing increases of over 4%.
The largest regional increase by value was seen in London, where average rents rose £90 (+6.79%). Percentage-wise, the biggest increase was seen in the West Midlands where rents rose +7.57% (£49).
Quarterly rental growth has remained steady, consistent with previous quarterly values, and nationally up 1.80% from the last quarter. London saw the strongest growth by value of any region, with a rise of £34 (2.46%), supporting the annual performance in the capital.
London bridges fallen rents
In the last 12 months, London has more than recovered from the rental falls it saw during the first year of the pandemic. Average rents now stand at £1,415, having fallen to £1,325 in Q1 2021. This represents a rise of £90 (6.79%) over the year and is £70 (5.20%) above the average rental value at the start of the pandemic two years ago.
Flats in particular saw a big drop during the pandemic as lockdown saw tenant demand for more spacious properties rise. However, in the last 12 months, demand for apartment living has revived significantly in the capital, with average rents for flats increasing £111 (8.51%), more than triple the fall in rents observed during 2020. Rents for flats in the capital now stand at £1,416. Accelerating rents for flats could be a signal that the pandemic trend of renters appearing to leave city centres has started to reverse.
The last quarter saw London’s terraced properties achieve the highest rise, up £96 (5.75%) to £1,766. Semi-detached properties rose £36 (2.08%) to £1,765, whilst detached properties rose £94 (5.02%) to £1,966.
Flats are back in demand nationally
The strong annual growth in average rents is reflected at property type level. Demand for detached properties has remained high throughout the last 12 months, with national average monthly rents rising £90 (8.43%) to £1,158 in the period. All other property types have also seen significant rises, with semi-detached up £61 (7.10%) to £920, terraced growing £52 (6.76%) to £821, and flats up £55 (6.81%) to £863. For the first time since before the pandemic, flats are the property type with the biggest quarterly rise in rents, rising £16 (+1.89%). Q3 2019 was the last quarter where flats were the property types with the highest rise.
“Consistent quarterly rent rises – coupled with survey results that suggest that a proportion of tenants are overpaying to secure a property – underlines the current intense demand for, and tight supply of, rental homes in the UK.
“Rents in London are also rebounding strongly, with average rents for flats in the capital increasing by £111 or just under nine per cent during the past twelve months – more than three times the falls seen during 2020, when tenants perhaps sought out more spacious homes outside of the Capital.
“Accelerating rents for flats could signal the beginning of the end of the pandemic trend of renters leaving cities.”
Matt Trevett, Managing Director, The DPS
The DPS Rent Index - The largest and most reliable indicator of rental trends
As the largest provider of deposit protection in the UK, we have a unique insight into the Private Rented Sector (PRS). Our database of domestic private rental prices across Britain is the largest of its kind. It's the most reliable indicator of rental trends in the UK.
Utilising a database of tenancies that covers rental market activity since 2007, we analyse data from millions of properties across the country. We include national statistics in our analysis to build a picture not only of rental cost but rental affordability.
This allows us to produce a rental index that’s statistically robust, reliable, and based on actual rather than advertised rents, delivering an accurate view of average rental values by property type across the UK.
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