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Rents are tumbling, choice is on the up ... and don't forget to ask for a free TV. Jill Papworth reports
News that rents have fallen around the UK, as unsold homes flood the lettings market, may be grim news for buy-to-let landlords but it's a boost for would-be first-time buyers looking to rent cheap while they save for a deposit on a mortgage.
A surge in supply of properties has pushed rental asking prices down by an average of 4.8% over the past year to February, according to Findaproperty.com's new rental index.
The average, across the UK, stands at £830 per calendar month (pcm), £10 lower than in January and £42 lower than a year ago in February 2008 when the average was £872 pcm. Other indices show even bigger falls, with rents down as much as 20% in some parts of the country. This has been fuelled by the soaring number of rental properties coming on to the market - those advertised on Findaproperty.com almost doubled in the six months between September 2008 and February 2009.
"Tenants are the real winners in this situation," says Andrew Smith, head of research at Findaproperty.com. "They have a huge stock of property to choose from, often high-quality owner-occupier stock - and are in a strong position to negotiate on rents and/or services."
Tenants are becoming more demanding as the market swings in their favour, he adds, and some landlords are offering extras such as cable or
satellite TV, weekly cleaners or even improving their property to make it more appealing.
But there are significant regional variations. Tenants are best off in the north-west of England where rental asking prices have fallen by a massive 14.3%, from an average £645 pcm to £592 pcm, over the past year caused primarily by a large increase in the volume of stock.
Smith says: "The majority are in the Manchester area, and the data supports the widespread belief that a large number of the new-build apartments in the city centre created over the past five years remain empty."
The variety in rental asking prices in major cities around the country can be seen in the table, above, along with a sample of what tenants can expect to be asked in rent for good quality, two-bedroom apartments in Manchester, Leeds, Bristol and Southampton - the cities where asking rents have gone down the most. In London, areas heavily dependent on tenants working in the financial services sector have seen the biggest annual falls in asking rents: Tower Hamlets, incorporating Canary Wharf (-8.8%); Kensington & Chelsea (-9.3%) and City of London (-11.7%).
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