DSP Rent Index Q2 Summary - Trends
In Q2 2021, London saw an £11 reduction (-0.83%) in average rents, down to £1,314. This trend is different to the rest of the UK, where average rents mostly increased or stayed around the same level.
Over the last 12 months, London is the only region to have seen average rents fall, with a £31 decline (-2.30%). Despite this, it is still the most expensive region. With average wages at £41,017, renters in London can expect to spend 38.74% of their monthly income in rent, far above the national average of 30.90%.
Semi-detached houses were the only property type in London to see a rise, increasing by £25 (1.49%) to £1,705. This is the second largest increase across the UK, after Yorkshire (£34, 5.24%). Detached houses saw the biggest fall, dropping by £29 (-1.62%), to £1,764.
By county, rents in Outer London picked up by £4 (0.32%) to £1,250, whilst Inner London dropped by £15 (-1.09%) to £1,367.
The second quarter of 2021 saw average rents in the South East reach £937, an increase of £5 (0.54%) on the previous quarter. Year on year, we see a sharper rise of £51 (5.76%) from £886, which is the largest across all regions in the UK.
After London, the South East is the second most expensive region for average rents, and three of its counties are among the top five most expensive counties in the UK: Surrey, Wokingham and Brighton & Hove. Interestingly, Kent showed the largest drop in the South East, down to £860 (£19, -2.16%), whilst the Isle of Wight, which saw a sharp decline in Q1, recorded the largest increase in this quarter to £702 (£34, 5.09%). With wages averaging £33,004, those in the South East can typically expect to spend 34.33% of their income on rent.
Semi-detached houses saw the largest rise this quarter, with rents increasing from £1,165 to £1,181. Detached properties in the South East registered the largest decline from £1,438 to £1,419, which makes this the only region in the UK, apart from London, to register a decrease for this property type.
In line with the national trend, average rents increased in the South West, with a £7 (0.89%) quarterly rise from £797. With average wages standing at £29,529, renters in the South West can typically expect to spend 32.64% of their income on rent, higher than the national average of 30.90%.
Bath and North East Somerset is the least affordable county for the whole of the UK in terms of percentage of wages earned, despite a £22 (-2.02%) drop in average rents this quarter, to £1,065. The City of Bristol and Swindon are the two other counties in the region declining the most in terms of average rents, with a drop of £8 (-0.85%) to £935 and £5 (-0.70%) to £708, respectively.
While all property types in the South West saw growth this quarter, the rise in average rents amongst semi-detached properties was the sharpest in the region, increasing by £23 (2.53%) to £931.
Average rents in the East remain the third most expensive in the UK. This quarter, they rose by £14 (1.65%) to £860. Average wages stand at £31,044, meaning that individuals in the East typically spend 33.5% of their income on rent, which is 2.6% higher than the national average.
Hertfordshire, which recorded the most sizable increase in average rents last quarter (£22, 2.14%), has now dropped back (£5, -0.48%) to £1,047, but remains in the top five least affordable counties.
Rents for all property types increased in the East in this quarter, and semi-detached properties saw the largest growth in the region, rising by £16 (1.63%) to £999. Detached properties saw the smallest increase across all regions (£3, 0.25%) to £1,191.
After remaining stable in Q1 2021, average rents in the East Midlands increased this quarter by £14 to £626 (2.29%). This is the second largest increase in the UK, after Wales. With average wages at £29,102 in the East Midlands, renters typically spend 26.01% of their income on rental costs - 4.89% below the national average.
By county, Leicester was the only area to drop back to £586 (£20, -3.30%), with Derby showing the largest growth, up £31 to £562 (5.84%). This is a reverse of the changes these counties experienced in Q1.
All property types increased in the East Midlands in Q2 2021, with semi-detached and terraced houses recording the largest spikes to £714 and £638 respectively (£20, 2.88% and £19, 3.07%) and flats registering the smallest rise to £559 (£10, 1.82%).
In the West Midlands, average rents have changed only marginally since last quarter (£2, -0.31%), standing at £645. Year-on-year however, there has been a £27 (4.37%) increase from £618. With average wages at £29,516 in the West Midlands, renters can typically expect to spend 26.43% of their income on rent.
West Midlands and Worcestershire were the only two counties that recorded a decline in rent this quarter, after picking up in Q1 2021. The reduction is £33 (-4.93%) to £636 and £3 (-0.43%) to £690, respectively.
Terraced houses saw an increase of £21 (3.19%) to £679 in Q2 2021, which is the 2nd largest increase for terraced houses, after Wales. Flats registered a £9 drop to £580 (-1.53%) which wis the second largest fall after the North East.
Interestingly, Yorkshire saw a relatively large increase this quarter compared to other regions, up from £549 to £562 (£13, 2.37%). Year-on-year the increase is £16 (2.93%), which is one of the smallest across the UK. With wages averaging £28,745, those in the Yorkshire region typically spend 23.64% of their income on rent, which makes Yorkshire the second lowest region after the North East.
Semi-detached houses registered the largest growth in Yorkshire, with an average rent of £683 and a quarterly increase of £34 (5.24%). This is the largest increase across all regions, followed by London, where average rents for a semi-detached stand at £1,705 (£25, 1.49% increase on Q1 2021).
Despite this, the City of Kingston Upon Hull is the least expensive county to rent in, with an average rent of £466 (£2, -0.43% compared to Q1 2021) and North East Lincolnshire takes third place.
In the North West, average rents dropped slightly (£2, -0.32%) to £627, but year-on-year the trend is different, with rents in fact rising £23 (3.81%) from £604. On average, wages stand at £29,558 in the North West, meaning renters in the region typically spend 25.65% of their income on rent.
Halton saw the largest quarterly increase in average rents, rising by £49 (8.80%) to £606, whilst Merseyside is the only county dropping back to £580 (£1, -0.17%).
All property types saw a rise in rental prices, but this remained small, with terraced and semi-detached showing the largest growth to £603 and £741 respectively (£5 or 0.84% and 0.68% respectively). Flats showed the smallest rise to £609 (£1, 0.16%).
The North East showed the largest decline in average rents across the UK, from £557 to £530 (£27, -4.85%) in Q2 2021. Moreover, two of the UK’s top five least expensive counties to rent in, are in this region: Hartlepool and County Durham. However, both counties recorded a slight increase in rent, £22 (4.88%) to £473 and £4 (0.81%) to £495, respectively.
Those in the North East spend the lowest proportion of their income on rent when compared to the rest of the UK. Average wages in the North East stand at £27,856, meaning that renters typically spend 23.01% of their income on rent.
Detached properties saw the largest rent increase to £767 (£10, 1.32%), and semi-detached also showed an increase to £602 - the smallest recorded across the UK (£4, 0.67%). Conversely, flats dropped more so in the North East, than in any other region to £523 (£29, -5.25%).
Looking at the counties, Tyne and Wear showed the largest decline, falling to £563 (£23, -3.92%), whilst Hartlepool had the largest rise to £473 (£22, 4.88%).
Average rents in Scotland remained flat this quarter, with just a £1 increase (0.15%) to £650. With wages averaging £31,605 in Scotland, those in the region typically spend 24.87% of their income on rent.
Of the top five most affordable counties in the UK, based on percentage of average wage, four are in Scotland: Dumfries & Galloway, North Lanarkshire, South Lanarkshire, and Falkirk. In Q2 2021, Dumfries & Galloway rose to £512 (£9, 1.79%) and North Lanarkshire, South Lanarkshire and Falkirk dropped back to £515 (£3, -0.58%), £519 (£24, -4.42%) and £521 (£11, -2.07%), respectively.
Most of the main cities such as Aberdeen, Edinburgh and Glasgow registered a rise in rents. Edinburgh increased £26 (3.15%) to £852, £30 (5.40%) to £586 for Aberdeen and £40 (5.92%) to £716 for Glasgow.
Flats in Scotland showed the largest increase across all regions in the UK, moving from £633 to £650 (£17, 2.69%), whilst semi-detached properties showed the largest drop in the region to £673 (£19, -2.75%) - the only drop for this property type in the UK.
Average rents in Wales have seen a quarterly and yearly increase, now standing at £626 (£16, 2.62% on Q1 2021 and £42, 7.19% on Q2 2020). Despite this, Gwynedd remains one of the least expensive counties in the UK, with an average rent of £498 (£23, 4.84% on Q1 2021). With average wages at £28,125 in Wales, those in the region typically spend 26.92% of their monthly income on rent.
Terraced properties registered the largest growth across all regions, with a rise to £641 (£38, 6.30% on Q1 2021), and there were no property types that registered a reduction in average rent.
The County of Denbighshire showed the largest growth this quarter, with a £48 (9.01%) to £581 quarterly rise, though the sample size was too small to be conclusive.
Northern Ireland remained flat this quarter, with a £1 reduction in average rents to £558 (-0.18%). But year-on-year there is a stronger upward trend, rising by £16 to £542 (2.95%).
Northern Ireland is currently third lowest in terms of rent as a percentage of average wage. With wages averaging at £28,324 in Northern Ireland, those in the region can typically expect to spend 23.82% of their income on rent. Northern Ireland is also second lowest in terms of rent, sitting just above the North East.
Article via DPS Online