A year in the PRS
As we bid farewell to an eventful and unpredictable 2019, we’ve looked at just what has changed in the Private Rented Sector since the start of the year.
The Bank of England base rate remained unchanged throughout the whole year, staying at 0.75%, meaning official rates have not risen above 1% since February 2009.
Interest rates were as high as 6% at the start of the start of the century; and there were five interest rate changes in a single year in 2001.
Average house prices:
As we entered 2019 the average price of a house was £228,000 – which rose to £235,000 in the most recent release from the Office for National Statistics.
This average growth in values of £7,000 over the year is a more positive rise than the increase which had been seen over 2018.
Average rental prices:
The most recent rental prices from HomeLet show that rents in the UK ended the year at £947 per month; which compares to £932 a month in January.
January’s average rent was up 2.5% compared to the previous year; which means rental prices are growing at a stronger rate (3.2%) at the end of the year than they were at the beginning.
In real terms the rental price increases are just £29 a month which suggests rent rises do not appear to be unsustainable for tenants.
Fees and deposits:
For tenants, the costs of joining the private rented sector reduced as certain fees to tenants were banned.
Meanwhile deposits were capped to five weeks’ rent (up to rents of £50,000 – with deposits over this amount being a maximum of six weeks’ rent).
Right to Rent:
Earlier in the year the High Court ruled that ‘Right to Rent’ checks breach human rights laws, as they could lead to landlords discriminating against tenants. The Home Office responded saying it will reassess the scheme. However, in a separate move the Government issued revised guidance confirming how citizens from the EU, EEA and Switzerland will be impacted once the UK leaves the EU.