The March 2012 HomeLet Rental Index shows the average cost of renting a home is now £1,158 per month – which is over 6% higher than the same time last year.

This month’s report also shows the average cost of renting a home around the rest of the UK, excluding Greater London, now stands at £661 per month – an increase of 3% from 12 months ago.

With tenants earning an average of only 1% more than last year, it appears their budgets are being increasingly stretched. Combining this with an increase in rental costs, fuel and inflation, suggests tenants have less disposable income than ever before.

Ian Fraser, HomeLet’s Managing Director, says:

“As economic uncertainly continues it’s likely that income could remain flat for many tenants this year, especially with the UK’s economy shrinking once again to enter a double-dip recession, and their income not growing at a proportional rate to rents.

“This is a worrying trend for tenants, and with recent reports saying almost one million people will have been out of work for more than a year by end of 2012, an increasing number of tenants will not only be short of disposable income, but also maybe unemployed and relying on benefits to pay for their living costs.

“Whilst the private rented sector has traditionally provided additional stock for tenants who receive housing benefits, changes to Local Housing Allowance (LHA) means many tenants are facing a predicament when trying to move into a property.

“The changes intended to encourage landlords to lower their rental costs – however, it seems many landlords have chosen not to let their properties to tenants who receive benefits.

“Tenants who receive LHA may be forced to move to more affordable areas outside the capital. As with home ownership, rented accommodation is becoming less affordable in the capital and many household budgets are really being stretched.”

To view the full HomeLet Rental Index, please request a copy by emailing marketing@homelet.co.uk

You can also read a summary of the report by visiting www.homelet.co.uk/rentalindex

The money was generated at various fundraising events and activities organised by HomeLet employees. These include office events, such as bake sales and quizzes that raised £300, and a row-a-thon that saw 10 HomeLet employees compete against other companies to row the distance between Dover and Calais. This earned The Nomad Trust an impressive £500.

The most recent event HomeLet took part in was the Lincoln 10km run, where another team of 10 members of staff ran for The Nomad Trust and gathered donations adding up to £560.

Cash from HomeLet – one of the market leading suppliers of tenant referencing and specialist insurance to the lettings industry – will now be used to improve the lives of homeless people in Lincoln who are working to regain their self-respect and independence.

Ian Fraser, HomeLet’s Managing Director, said: “Employees at HomeLet have really enjoyed raising money for The Nomad Trust, and it’s a massive achievement to donate so much after just 12 months. After buying a minibus for the charity in October, it’s now great to be able to help the charity in other areas.

“We’re set to support The Nomad Trust for the next two years, and have already planned a number of fun and exciting events to not only generate more cash, but also raise the awareness of homelessness and support local people in need.”

Brenda Shiels, said: “To have so much money donated at once is such a fantastic help and will go a long way in helping to develop our facilities on Monks Road, and carry out much-needed improvements to our medium to long-term accommodation on the outskirts of Lincoln. On behalf of all the staff, volunteers and service users from The Nomad Trust, I would like to thank everyone at HomeLet for their amazing efforts.”

In November, rents in London increased to an average of £1,177 per month, whereas the average cost of renting a home outside the capital decreased over the same period to £653 per month, the latest HomeLet Rental Index reveals.

The increase in rental amounts in the Capital means costs are now 13% higher than last year. This is a stark contrast to the other UK regions that are only an average of 1.6% more than at the same time in 2010.

Although most other UK regions have seen an increase in rents over the past year, they are minimal compared to the increase in London. Increases range from 0.2 per cent in the North West and almost six per cent in East Anglia. The only regions that have seen average rental amounts decrease are Northern Ireland, the North East, and Scotland, which have dropped by an average of almost two per cent over the past 12 months.

Ian Potter, Operations manager at ARLA (Association of Residential Letting Agents), said:

“The increase in the number of people renting a home means it’s now more important than ever that consumers have full confidence in lettings agents, and the industry must respond to their concerns about bad practice. That’s why in the absence of regulation, we developed our own licensing scheme to ensure all ARLA members are protected against negligence.”

John Boyle, Managing Director of HomeLet, said:

“The soaring cost of renting a home in the Capital, compared to the rest of the UK, reflects how demand for rental properties is increasing due to people’s continuing struggle to get onto the property ladder. Combined with the current Eurozone issue, this economic uncertainty could result in the demand for rental properties increase, and cause rental amounts to soar even further. Traditionally demand for rented homes dips before Christmas – however, London is bucking this trend and demand is higher than ever.

“This demand offers a fantastic opportunity for landlords and property investors who could offer a much needed supply of rental properties to the industry. However, as Ian mentions, it is essential confidence in the industry is maintained and tenants only rent a home through a regulated letting agent.”

To view a summary of the November 2011 HomeLet Rental Index, visit www.homelet.co.uk/rentalindex

2011 has been an eventful year, and we are looking forward to building on what we have carried out and achieved over the past 12 months and making our partnership even stronger.

Below are details of our opening hours over the festive period:
 
Friday 23 December                  8.30am – 1pm
Saturday 24 December             Closed
Monday 26 December               Closed
Tuesday 27 December              Closed
Wednesday 28 December        8.30am – 6pm
Thursday 29 December            8.30am – 6pm
Friday 30 December                  8.30am – 6pm
Saturday 31 December             Closed
Monday 2 January 2012          Closed
Tuesday 3 January                      8.30am – 6pm (normal working hours resume)

Helping others at Christmas…

Christmas is generally a time of happiness, spending time with family and enjoying a bit too much food! However, for some it’s not always the case. So employees at HomeLet have been working hard all year to raise money for The Nomad Trust – our nominated charity that helps homeless people in the Lincoln area to regain their independence and self-respect.

Rather than send out Christmas cards, we’ve decided to donate what we would have spent to The Nomad Trust. The cash can then be spent on the charity’s service users who are not fortunate enough to spend the festive period with family in a home of their own.

So, from all of the HomeLet team – have a fantastic time over Christmas and New Year – we’re really looking forward to working with you in 2012!

The referencing and specialist insurance company won the Innovation category at this year’s 2011 Landlord and Lettings Awards. In addition to this top prize, HomeLet was a finalist in the Insurance Services, Supplier and Website categories.

The Innovation award recognises the supplier that has been most innovative in their sector, and HomeLet was praised in particular for the launch and success of its new referencing product, Optimum. Optimum was launched earlier this year and has not only achieved 150% above predicted sales figures, but also been very well received by customers.

As well as offering a robust tenant reference, Optimum offers the unique guarantee – if any tenant referenced through one of two HomeLet checks, Insight and Enhance, either default on their rent within 12 months of moving into the rented property, HomeLet will evict them – for free.

The increase in sales has also seen an increase in customers, with the company’s 1,000th customer being welcomed to HomeLet in October.

Kyle Clark, who works for Homes4U – the 1,000th letting agent to partner with HomeLet, said: “Signing up with HomeLet couldn’t be easier. We signed up online and processed our first reference that day. To be their 1,000th customer is a privilege; although I’m sure there will be hundreds more to join before the year is out!”

HomeLet puts this success down to a number of factors; increased demand for rental properties, the importance of using a reputable letting agent and referencing supplier, its innovative products and services, and the fact that many more landlords are asking their letting agents for HomeLet by name now.

Managing Director of HomeLet, John Boyle, said:

“I am delighted at our success at last week’s Landlord and Lettings Awards that recognises our innovative contribution to the lettings industry. It is not only testament to the hard work of our team who’ve developed the product, but also our customers who’ve used HomeLet to reference potential tenants.”

Heidi Abbott, HomeLet’s Operations & Marketing Director, who collected the award, said:

“To win the Innovation award was a fantastic result in itself – however, to be finalist in three other categories reflects the commitment we continually dedicate to our customers to make sure they receive the best possible service.”

Over the last month Professional services claims company Merlin has seen increased activity around new flood claims across their client base, particularly in Wales, South West England, and Northern Ireland, with the latter experiencing the highest influx. With the winter weather about to set in the potential for further flooding is a high probability.

Homelet is urging Landlords to check their Buildings Insurance to make sure they’re properly covered in the event of a flood. Landlords should also check their contents insurance against flooding if renting out a furnished property to tenants.

John Boyle, Managing Director of HomeLet says:

“Landlords must be aware that having flood cover within their buildings insurance is important considering the current situation. Those living within the current affected areas need to be particularly conscientious. According to The Environment Agency; the average cost of a home flooding is £28,000, compared to £7,300 losses from fire damage and just over £1,000 for a burglary. This signifies just how important comprehensive buildings and contents insurance is.

“If landlords do not ensure they have comprehensive flood cover; especially within these predicted affected areas of Wales, South West England and Northern Ireland; their properties could become damaged by the affects of flooding and putting it right out of their own pockets could cost a fortune. This could also mean their house is inhabitable; thus their tenants having to move out, meaning no rental income. If you are concerned about your property being at risk, please visit www.environment-agency.gov.uk for up-to-date information on areas at risk of flooding.”

Last week HomeLet donated over £4,000 to the Nomad Trust. The money has been raised in just five months at various events organised by members of staff, including a cake sale, quizzes and most recently Halloween-themed fun, including a fancy dress competition and trick or treat game.

This staggering amount of cash is more than half of the £8,000 target HomeLet has set itself to raise by April 2012. The cash will then be spent on a mini bus for the charity’s service users to travel around the area for journeys, such as to job interviews, to help people move off the streets and begin to lead a more normal life.

 The Nomad Trust is a Lincoln-based charity that helps homeless people in the area from all walks of life to regain their independence and self-respect. For the past 26 years, the organisation has been helping homeless and vulnerable people in Lincolnshire by running an emergency night shelter and charity shop. The Trust’s workers also support its service users by offering life skills and resettlement advice when they are able to move into their own home.

HomeLet announced its support of The Nomad Trust in May 2011. Its employees are set to raise money for the charity for three years, and a calendar of events has already been organised so another £1,000 is raised in time for Christmas.

Brenda Shiels, Service Manager at The Nomad Trust, said:

“For HomeLet to have raised more than half of the amount needed to buy the new minibus already is a fantastic achievement. The vehicle will be a massive benefit to our service users who struggle to travel to different places once trying to rebuild their lives. Therefore on behalf of The Nomad Trust I would like to thank everyone at HomeLet for all their hard work and generosity.”

John Boyle, HomeLet’s Managing Director, said:

“Raising the money at so many events has not only been enjoyable, but also very gratifying as we know the cash is going to be spent on local people who are finding it hard to get themselves out of a traumatic and difficult situation.

“We’re now confident we can raise even more than the £8,000 needed for the minibus, so we can help this very worthwhile cause assist as many local homeless people as possible over the next few years.”

Data from the October HomeLet Rental Index shows that the average number of tenants living in one property has increased from 1.5 in October 2009 to 2 in October 2011, suggesting that people are increasingly unable to afford renting in the capital on their own.

Since 2009 rents in Greater London have risen by a dramatic 23% and currently stand at £1,158pcm. On average tenants in London are now paying £775pcm for their share of the rent, this is a rise of 13% when compared with October 2009. Despite the increase in rents average tenant incomes in the capital, over the same period of time, have only risen by 6%.

Tom Woodhead, a graduate who lives in a shared rented property in London with four other tenants, said:

“When I graduated, I naturally assumed I would be able to move out of my shared student house into my own home – whether bought or rented. The option of buying my own home has certainly been ruled out for the imminent future because deposits are too expensive.

“With soaring rental costs, realistically renting on my own is also not an option. Living costs are just too expensive, especially when you include other bills. So realistically I have no option but to live in a house with four others and share the rent.

“This isn’t an ideal situation, and certainly not my first choice – but, sharing a rented home does mean I’m close to work and close to the centre of London. I am aware that there are many people in the same situation as me, and so I only hope that prices become more affordable to allow people, such as myself, to actually afford the luxury of living in my own home.

John Boyle, Managing Director of HomeLet, said:

“More tenants in the capital and many other parts of the UK are looking to share a property rather than live on their own – however, for the many it’s not through choice but necessity. With average rents rising at a much higher rate than average incomes, budgets are really being stretched.  

“If rental amounts inflate next year as they have done through 2011, rents in London could become unaffordable for an increasing number of people.”    

In September HomeLet referenced 41,100 applicants for rented properties – a 17% increase in volume from the same time last year, and an amount never achieved before. Also, since July 2011, HomeLet has carried out more than 110,000 references.

Following a 4.5% increase in the number of letting agents HomeLet works with over the past 12 months, the additional customers have also enabled the company to increase its number of employees. Since April 2011, 81 new members of staff have joined HomeLet – seeing the overall number rising by more than 30%.

Another factor which has contributed to HomeLet’s success is the increase in demand for people wanting to move into a rented property. According to the HomeLet Rental Index, more people than ever are moving into the private rented sector, and average UK rental amounts have increased by 8% from the beginning of this year.

John Boyle, Managing Director of HomeLet, said: “Carrying out this record amount of references has not only benefited HomeLet, but also our letting agent customers who have seen the amount of tenants applying for their rented properties increase by 15%.

“I am very proud to see HomeLet expand despite local and national economic struggle. With demand for rented properties at an all time high, and people still struggling to purchase their own home, HomeLet is currently moving around 2,000 tenants in the UK every day. With this in mind, I am confident we can work with our agents to increase this even more to not only boost our individual businesses, but also the lettings industry as a whole.”

According to the latest HomeLet Rental Index, over the last two years there’s been a 10% increase in the percentage of new tenants entering the Private Rented Sector aged 18-35 who previously lived at home. In September 2009 just 44% of tenants under the age of 35 had previously lived at home. In September 2011 this figure has risen to 54%.

This trend is most noticeable in the 18–21 year old age group. In September 2011 the percentage of 18-21 year olds moving from one rented property to another was just 16%. This figure has halved since 2009 when it stood at 30%.

The dramatic rise in youth unemployment, which increased by 78,000 to 973,000, (source: Office of National Statistics), and an increase of 4.5% in average rents, when compared to September 2010, reflects how younger people are feeling the squeeze more than anyone else.

John Boyle, Managing Director of HomeLet said:

“Our data shows that average tenant income levels are not increasing at the same rate as rents. With the sharp increase in youth unemployment and inflation at high levels the prospect of buying a home is a distant dream for many. But for some younger people, particularly those without jobs, renting may also be too expensive, forcing them to stay in the family home for longer.

“Although we’ve seen a reduction in the percentage of younger tenants moving from one rented home to another, we’re still seeing high volumes of younger tenants entering the Private Rented Sector. In the past many younger people living at home may have moved directly into the sales market. But with deposits high and confidence in house prices low, the Private Rented Sector is still providing a viable alternative to home ownership whilst helping to increase social mobility.

“Our latest data really reiterates the term ‘Generation Rent’, as the Private Rented Sector expands it will become home to an increasing number of younger tenants who might traditionally have moved directly in to the sales market. And with the average age of first time buyers increasing the Private Rented Sector will also provide a home for younger tenants for longer periods of time than we’ve ever seen in the past.”