20th
Mar 2016
Tenants have less buying power when agreeing new tenancies with one in five paying over the asking price to secure a ‘home’.
The latest report from a leading estate agency and lettings service claims that over the last twelve months 12% of lets were agreed at over the advertised price, tenants are now paying on average 99.9% of the going rate. Unsurprisingly the highest average let in London was 100.9% of the advertised rate.
Approximately 20% of tenants renting their homes in the Capital in order to make sure that they achieved their ‘home’ are paying over the odds. London tenants are on average paying an extra £94 per month and with the average tenancy lasting seventeen months it means a ‘top up’ of £1,578 over the original asking price. Across Britain the average extra monthly rent stands at £44 over the rate. The lowest area is Wales where one in twelve tenants pays on average an extra £24 per month.
The Capital has ‘enjoyed’ the highest increase in rents in England since 2007; rents are 34% above their pre-recession days; whereas it is just 12% across the UK. Supply and demand gives landlords the controlling factor over new tenancies for in 2008 it was just 3.8% of new tenancies that agreed to pay more than the asked for price; in fact 23.5% of tenants were able to get themselves a lower price than advertised. Only 8% of tenants up to this year have been able to pay less than asked for.
Over the last twelve month the UK rent growth has risen by 3.2%, which is two thirds up on February 2015. The South East with 5.8% has the highest growth rate above the UK average, with the South West at 4.8% and Greater London at 4.8%; the North’s average rents increased by 3.8% whilst the Midlands could only muster 1.1%.
Johnny Morris, Research Director of the chain, said: “The combined effect of growing numbers of people renting and a lack of supply has seen tenants’ ability to negotiate diminish. Tenants are having to compete more often and with more people in order to rent the home they want, meaning they need to offer more money in order to push ahead of the crowd.”
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