2019 was a year of recovering rental values following the drop observed in 2018. The DPS (Deposit Protection Service) reports a 1.4% increase in rents in 2019 (Q42018 to Q42019).
The average monthly rent in the UK is now £773, or £672 excluding London. London continues to be the most expensive region to rent with average monthly rents of £1,345. The North East is the cheapest region to rent with monthly rents of £518.
If we break this down into the local area and look at the figures for the Medway Towns to see how rents have changed over the last 12 months.
- Over the last 12 months, the average rent achieved for properties let in Medway Townswas £826 per month. This is a +6% change on the previous 12 month period.
- 37% of properties let in the past 12 months were flats, achieving an average rental value of £728 per month. Houses achieved an average rent of £899 per month.
- 42% of tenants are aged between 18 and 29 with the average age being 35 over the last 12 months.
The graph above compared the rent in the Medway Towns vs the South East of England, this shows that rents are lower across all the different types of properties. However, it is worth mentioning that the property prices in the Medway Towns are lower compared to the South East of England, representing a slightly better return on investment or yield within the Medway Towns. With the average house price in the Medway Towns being £250,575 vs £327,758. The average property price is higher within the Medway Towns vs the rest of England and Wales.
What is really interesting is the growth in rents by property type within the Medway Towns, compared to the South East of England. In the above graph shows that the change in rents in the Medway Towns is far higher compared to the South East of England, in all property types. With semi-detached houses increasing by 6.5% compared to below 2% for the South East of England.
Again the graph above shows the Medway Towns annual percentage change in average rents, as you can see compared to the South East of England, Medway is performing well above the South East of England over the last 12 months. This shows that there has been very good growth in the Medway Towns in terms of rent, but this could also be that we may be beginning to see a change in the number of rental properties available compared to the demand. With the Government introduction of changes to tax and regulation, to try to deflate the buy to let market. We may actually see that this has a negative impact for tenants as this will drive the rents up as landlords will look to cover loss of income and the economic argument of too many people chasing too few goods (in our case rental properties).
The figures over the last 12 months show a very strong rental market within the Medway Towns and buying a buy to let property in Medway is still a good investment. But for tenants, they will feel the brunt of some landlords exiting the market due to Government intervention with rents to continue to increase in the foreseeable future.