With North West rental prices now averaging £791, the region has seen the sixth largest increase in rental costs in the UK and places as the fifth most expensive region to rent. This places the North West firmly in the middle of the pack – but with the end of the pandemic in sight, it will be interesting to see how things progress in the coming months.
What the report shows
The report offers the following five key takeaways:
- The average rent in the UK is now at a record high of £996 – the fifth month in a row that the average price has increased.
- When London is excluded, the average rent in the UK is now £853, showing an increase of 0.7% on last month, and an increase of 6.2% on last year.
- Nine of the twelve regions monitored by HomeLet showed a MOM increase in rental values between March 2021 and April 2021, with the North East seeing the largest increase of 2.4%.
- Eleven of the twelve regions monitored by HomeLet showed a YOY increase in rental values between April 2020 and April 2021, with the South West seeing the largest increase at 8.6%.
- However, rents in London continue to fall YOY, showing a 5.3% drop between April 2020 and April 2021 – the eleventh decrease in annual variance in subsequent months.
From the perspective of a Wirral landlord or tenant, what will be the most interesting is that – as with reports on the sale and purchase of property, the rental market too sees a shift between the city centre and the suburbs and from the suburbs to satellite towns and rural areas – with the increases almost flipped on their head from pre-pandemic norms.
In addition to being around the middle of the pack when it comes to increases and rental prices, the North West also rates as the second lowest (after the North East) in terms of rental costs to income ratio – meaning that, for the most part, the North West remains an excellent place to rent and work.
A note of caution
The report does, however, the report also offers some words of warning from HomeLet’s group CEO Andy Halstead who states:
[Once] the furlough scheme ends, millions of people could potentially be facing unemployment at the same time as tackling the most expensive rental market on record. The country risks a deepening crisis if policy changes aimed at restoring balance to the market is not urgently pursued.
The tone of much of Halstead’s message is somewhat downbeat, but while much of it deals with issues caused by the possible removal of section 21, the above quote is the real issue raised. There are a lot of people and businesses for whom and which the furlough scheme has proven a vital lifeline and, once it is withdrawn, there are likely to be job losses and a shock to the economy.
Unless this problem is addressed at its source by government – with a slower phased withdrawal of furlough or the assurance of backing for small businesses, there will be a knock-on effect on all sectors including the property market.
What this means for Wirral landlords
In short, the present situation makes the need for good landlord insurance – which offers cover for missed payments – even more plain. While we always advise our landlords to make sure they are covered by insurance, there should be a huge push to make sure that properties are covered for the losses that could follow one or more tenants in one or more properties losing their job as a direct effect of the end of furlough.
Need help keeping up with the latest news and changes to market conditions? Contact Us to see how we can help take the stress out of managing your property portfolio.
