fbpx

Outer London drives rents up 3.7pc

Ryan Fowler

August 26, 2014

The index also found that there is an 8.1% premium for a furnished flat, typically equating to £52.40 extra in rent each month and a 2.8% premium for furnished houses, equating to £14.90 extra in rent each month, when compared to an unfurnished property.

In some more affluent urban locations a landlord can expect to expect to achieve a third more in rent for offering a property furnished.

City centre locations where furnished properties are making a big difference to the premium a landlord can achieve include Salford in Manchester following the BBC’s relocation to the city.

Seaside locations, such as Eastbourne, have also seen a boost with a higher percentage of elderly people who are willing to pay a premium for furnished properties in move-in condition.

However, there are exceptions, particularly in less affluent areas such as Barnsley and Luton, where falling levels of homeownership amongst the young mean extended periods of time spent in the private rented sector.

In general, the locations where furnished property attracts a smaller premium tend to be areas outside regional city centres. These are typically expensive areas of Central London, where the cost of furniture comprises only a small percentage of the rent and in more rural areas where there is a larger population of older families with children who are more likely to have their own furniture.

There continues to be a gentle growth in average monthly rents in England, Scotland and Wales in July 2014, with the average UK rent now standing at £898pcm.

The highest average monthly rent remains in Central London at £2,503pcm and the lowest in Scotland at £643pcm.

In terms of property size, there has been a year-on-year increase in average monthly rents apart from three bedroom homes which have seen a 7.2% decrease year-on-year. One bedroom properties saw the greatest increase in rents, up 4.2% year-on-year and 1.5% month-on-month.

Rent arrears have fallen year-on-year apart from in the South West, Midlands and the North where arrears have increased slightly. While jobs are being created at a record rate and the claimant count continues to fall, wage growth has lagged behind inflation putting pressure on tenants.

Nick Dunning, group commercial director, said: “Whether you are a first-time landlord or a seasoned investor it is important to understand what tenants are looking for.

“This not only helps to minimise void periods but also assists in achieving the highest return from the rental property.

“In city centre locations, most tenants now expect to be able to move into a high quality furnished property with minimal hassle and are willing to pay a premium to do so.

“The higher percentage of younger people living in city centres and the turnover of tenants mean tenants are less likely to have their own furniture and are keen to avoid the expense of moving it.

“Outside of larger towns and cities, the premium attached to furnished properties tends to be smaller with families and older people making up larger proportion of tenants.

“Turnover in these markets tends to be lower with tenants more likely to have their own furniture already. In such markets it pays for the landlord to be flexible, giving a would-be tenant choice.”


Sign up to our daily email