Rents are going up however you calculate what tenants are paying – the argument is by how much as three independent firms work out the amount in different ways.
The government is looking at recommendations from the UK Statistical Office about instituting an official index, but to date this has only progressed as far as a Whitehall talking shop.
Meanwhile, three independent firms offer their version of a rental price survey each month.
- LSL Property Services – Billing the company as the UK’s leading letting agents, LSL owns high street brands like Reeds Rains and Your Move
- Homelet – One of the largest landlord insurance providers
- Move with Us – Only launched on October 19, 2012, another independent property firm
According to the figures issued by each the average UK rent could be £734 (LSL), £808 (Homelet) or £970 (Move with Us).
So why do the figures offer such a wide difference in average rents?
Several factors could contribute to the variance, including:
- Sample size – The number of rental properties counted as sources can affect the figures as the smaller the sample the less accurate the results
- Location – If the majority of properties for the samples are in London and the South East, then the average rent would likely be higher than an index based on rents in the North East, where rents are lower.
- Customer base – If one set of figures is based predominantly on letting upmarket homes, while the other on cheaper rentals, the average would be pulled in different directions
- Geography – Homelet covers England, Scotland and Wales, while LSL extends to England and Wales
“The index is based on analysis of approximately 18,000 properties across England and Wales from management information. Rental values refer to the actual values achieved for each property when let,” says the LSL explanation of how their figures are worked out.
Homelet gives less detailed information about how their figures are compiled.
Homelet has access to one of the largest volumes of data on agreed rental amounts in the UK, and shows agreed rental amounts rather than advertised rents,” says the firm’s web site.
Meanwhile Move with Us is based on asking rents for 150,000 properties nationwide.
For landlords, the most likely conclusion is none of them are right because a market rent for a specific property comes down to the local market.
If your buy to let rent is not achieving the average, it’s probably because no one owns the average home.
The sooner the government steps in with an official index that can access rents at a postcode level, like the Land Registry market trend data can for house prices, the better.
