According to a recent report from the Office for National Statistics (ONS), private rents are falling across the private rental sector; this includes both student rentals and the general population. Most important to note, this is the first real terms fall for a long time.
How Is It Measured?
ONS data said that rents grow just 1.2% across the UK between June 2020 and June 2021. That was much lower than any inflation measures, according to the NRLA. Most interesting is that the current smallest measure of inflation is the Consumer Price Index which was 2.4% at the same time. That means consumer prices are increasing at double the rate of rental inflation.
National and Regional Variations
There are also variations between each of the three countries in mainland Britain: Rental prices increased by:
- 1.1% in England
- 1.2% in Scotland
- 1.5% in Wales
There are also notable variations between internal regions in England. In London – and surprisingly – rents fell by 0.1% in the capital. Analysts feel the pandemic has impacted this as high-density populations have made people desire more open spaces.
The highest rent increases were in the midlands where growth was 2.4% for both East Midlands and West Midlands. Not a huge rise, and completely in line with the CPI.
Market Forces
There are a number of uncertainties currently impacting rental prices – not least of all the economic impact of the COVID-19 pandemic. NRLA also recently published data from the Royal Institution of Chartered Surveyors (RICS). That projected a 3% rent increase between June 2021 and June 2022. The main reason is demand outstripping supply in the private housing market.
Concerns over artificial inflation and taking advantage of the pandemic – people desperately needing somewhere to live and unable to leave – have proven false. The market has adapted to a less mobile renting population.
Should You Review Your Rent Prices?
There is no universal “yes or no” answer because so much depends on your individual circumstances. It’s a good idea to review your prices every couple of years. Take some time, typically in the autumn and winter before students for the next academic year begin their search, to research the situation in your local area.
What are student properties currently charging for rent? Are yours high or low? What about people in the same or surrounding streets (these things will always impact price)? As with everything, do your research before any price change.
Student property is just as competitive as the general population with just one major difference – your tenants will typically stay for one year and so your constant review is necessary.