JANUARY 08, 2018 | BY A & S Property
Rental price growth ‘expected to accelerate this year’
UK rents grew by 0.56% in 2017, led by gains in London commuter hotspots, according to the latest rental price index by Landbay.
The data, which is powered by MIAC, reveals that commuters in almost half of London’s most popular commuter towns - 17 out of 40 routes monitored - face a greater overall financial burden from growing rents than from train fares, with the average train season ticket prices increasing by an average of 3.6% across the UK last week.
Average rents in these 17 towns rose by an average of £183 (1.68%) in the year to December 2017, while rail fares have jumped by an average of £142 (3.6%).
Combining annual rental and rail fare increases, commuters in these regions are facing a total additional outlay of £325 a year.
Cambridge and Brighton have seen the greatest monetary rise in rents, £228 (2.06%) and £202 (1.58%) respectively, as rail fares in both regions rose by £172 and £163.
A further six town in London’s commuter belt saw rents increase by in excess of 1% - more than double the UK average. This included Luton, Hastings, Basingstoke, Ashford, Canterbury and Horsham, which have seen rents rise by an average of £146, almost as much as the average £166 increase in rail fares.
However, not all buy-to-let hotspots in the South East have seen rents increase, with average rents in Guildford, Reigate and Woking falling during 2017, by an average of £127, or 0.73%.
Commuters living in Guildford, Reigate and Woking, which all saw rents fall by £127 (-0.73%) in 2017, will be saving enough to offset the rail fare hikes of £126, £99 and £113 respectively.
According to Landbay, there are now signs that demand for low-rent accommodation by long-distance commuters to London is pushing up rents in many commuter towns. This is in stark contrast to London, where they fell by -0.8% in 2017.
John Goodall, CEO and founder of Landbay, said: “Commuters have seen their season ticket prices rise by more than £100 this week, the vast majority of whom are also looking at a double whammy of rent rises driven by greater tenant demand. At a time when rents in the capital are falling, some may even be considering a move into London, to be done with the train commute altogether.
“With inflation riding so high, rail fare growth shows no sign of slowing, and without a radical house building plan for purchase as well as purpose-built rental properties, rental price growth is expected to accelerate this year as well.”
UK Rental Index
UK Rental Index by number of beds
Rental Index and rail fare increases by commuter hotspot
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