Cost of renting one-bed flats pushed up by graduate job hunters

21st October 2015


Rent rises for one bedroom flats accelerated sharply in September, sparked by high demand from recent graduates wanting to live near their first job.

Rents for one beds saw an annual rise of 3.9% in September, up from 2.9% in August, reaching an average of £1,054 according to the monthly Landbay Rental Index, compiled by MIAC, a data analytics consultancy.

The new index, which launched last month, tracks rental trends to the county and London borough level in combination with the number of bedrooms.

The largest rental increases for one-bedroom flats were in Edinburgh (up 12%), Swindon (up 11%) and Southend on Sea (11%) although these were from a lower base than  some parts of the country.

Last week Government labour market statistics revealed that the UK has the lowest unemployment rate since 2008. The employment rate for those aged 25-34 is at its highest level in over twenty years at 81.1%.

While the costs of renting are increasing, this coincides with a fall in other costs (September CPI) and UK-wide wages rising at 3%.

The index reveals that rents for three bed properties are seeing the biggest overall rental rises, up 4.8% year-on-year to £1,489 in September.

Across all properties, UK rents rose by 3.7% in the last year to an average £1,288. This was the first increase in annual growth since February, when the average monthly rent was £1,277.

John Goodall, co-founder and chief executive of Landbay, says: “The upward trend in UK rents can simply be explained with one word: jobs.

“The UK’s job market is going from strength to strength and the rental market is staying hot on its heels.

“The sharp seasonal jump in rental growth for one beds reflects a buoyant graduate job market as people move to their first job.

“Flexibility and freedom is the order of the day for first jobbers, and one bedroom flats offer the perfect springboard to take the plunge into full-time working life.

“One bed flats are also popular for couples and young professionals who don’t want to flat-share.

He adds: “For potential investors, these rental figures show how resilient residential property is as an asset class – even when you have unusual economic forces combining like the current mix of low inflation, low interest rate, and high wages.”

Table 1: Top Ten Rental Risers – 1 bedroom

 Counties outside of London Annual rental change (September 2015) Average rent 
Edinburgh City   12.0% £671
Swindon  10.9% £564
Southend on Sea   10.5% £610
Reading  10.1% £778
Milton Keynes  9.5% £748
Medway  9.3% £621
Hertfordshire  8.2% £798
Bedfordshire  7.5% £555
Essex  7.3% £653
Windsor and Maidenhead  6.8% £925

Table 2: UK rental increases – all bedrooms

Rent changes in UK and nations  Annual rental change (September 2015) Average rent
United Kingdom  3.7% £1,288
England  3.7% £1,325
England exc London  2.8% £746
Northern Ireland  10.2% £561
Wales  3.5% £608
Scotland  3.1% £694
London  4.1% £2,057

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