Finding Out What Rents Are Actually Being Charged for Properties Like Yours
Finding Out What Rents Are Actually Being Charged for Properties Like Yours
Whenever a landlord is setting rents – either for a new tenancy or adjusting rents at an annual review, it is good to know what the local market rents are.
Fortunately, the ONS collect rental data – and publish it quarterly. It can be useful, but has some limitations.
The data is obtained from private rented sector lettings by the Valuation Office Agency (VOA), an arm of the government. Landlords, letting agents and tenants across the country contribute this information, which is mainly used to help Rent Officers provide valuations for Housing benefit purposes and for Rent Act 1977 Fair Rent registrations.
In London, the Mayor of London’s office publishes the median rents by postcode, borough and for properties by number of bedrooms. This is then used in the London Rent Map, which is rather useful.
See the link here: https://www.london.gov.uk/programmes-strategies/housing-and-land/improving-private-rented-sector/london-rents-map
All the VOA collated data covers 12 months of data. It tracks rent trends while smoothing out the data too.
The latest data as of the time of writing this post (30th December 2023) was published on 31 July 2023, but actually covers the period from April 2022 to March 2023, so one can see that at a time of fast rising rents, as we have had recently, the data is somewhat out of date. In London, I believe Rightmove data are showing rent increases of 10 to 15% annually, so that delay could be quite significant.
When I set new rents for the year at an annual rent review, I always tell the tenants how the new rent compares with the lowest priced property advertised on Rightmove of a similar type, (say two bedroom flats), in the same postcode area or borough.
Usually, this looks good as my rents are often very competitive with the lowest equivalent currently marketed flat or house with the same number of bedrooms in the same postcode or borough at the Rightmove portal.
But of course, the newly advertised rents showing at Rightmove will be higher than the VOA data for two good reasons:
First, because as explained above, the VOA data is a little out of date and rents are usually inflating. And second, because good landlords with good tenants are like me are not constantly trying to keep their current tenants plugged in line with the rents being asked for the newly marketed properties at Rightmove. (They don’t mind drifting a bit lower than market rents if it means they get to keep good tenants. And I know there are many landlords who have not increased the rent for years, which does seem a bit silly to me).
If we pick a typical example by picking a postcode at random we can see how the VOA and Rightmove data compare. If we look at two-bed properties in SE13, which is a postcode in Lewisham in London, the median rent shown by the VOA is £1500 per month for a typical two bed property (and £1428 for all the Lewisham borough), but the very cheapest two bed property available on Rightmove right now in SE13 is £1600 and the median at Rightmove is around £2100.
So, there is quite a difference between VOA/ Mayor data and Rightmove asking rents for advertised properties.
Still, the VOA data is the only one that tracks actual rents, albeit a little behind time – and is still a useful albeit limited guide to what real landlords are actually charging right now.
For what its worth, I would guess the true median figure for all two bed properties being charged in SE13 right now lies somewhere between the Rightmove median figure of £2100 and the VOA based £1500, so around £1800 per month.
Other portals than Rightmove are, of course, available.
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