New tenancies across the UK increased by 15% in the last 12 months while monthly rental prices rose by 8%, according to the latest index.
That means that rents are generally around £758 a month and although this is 8% higher than in January 2013, it is down 1% compared with December 2013.
In London rents have not seen the same growth and are up 1% since January 2013 and down 2% since December 2013, taking the average monthly rent to £1,395.
But the number of new tenancies in London has increased more annually compared to the rest of the country with an increase of 17%, the Sequence index also shows.
The data also shows that buy to let mortgage applications increased by 17% annually as the appetite for property investment remains strong.
‘The rental market across the country has started the year with renewed vigour and increasing levels of demand,’ said Stephen Nation, head of lettings for Sequence, a 300 branch network which also includes Barnard Marcus, William H Brown, Fox & Sons.
‘We have seen a surge in the number of new tenancies this month, up 15% annually across the UK and 17% in London as tenants compete to secure their property at the start of the year,’ he explained.
‘This high level of activity is due to the sheer volume of new tenants coming into the market as new tenant applications increased by 6% annually across the UK and 10% in London. Across the UK the supply is keeping up with demand, with new rental properties increasing by 6% annually, however, in London there is a shortfall, down 4% annually,’ he pointed out.
He also said that the good news is that buy to let remains the investment of choice across the UK, with the number of new mortgage applications increasing by 17% annually.
‘This news comes in spite of the retraction of Funding for Lending to the mortgage market and highlights just how strong this market is. The pipeline of new investors we are seeing will continue the flow of properties onto the market and appease the demand, which should in turn, keep rents stable,’ added Nation.
This article was republished with permission from Property Wire.