September saw a significant rise in rents for one-bedroom flats, sparked by demand from recent graduates looking to rent a home close to their first job.
That is the conclusion of the Landbay Rental Index, which noted an annual rise of 3.9 per cent in rents for one-bedroom properties. In August, the increase was recorded as 2.9 per cent.
John Goodall, chief executive officer of Landbay, says: “The upward trend in UK rents can be simply 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.”
In some areas, rents rose at levels far above the national average; in Edinburgh, for instance, there has been a 12 per cent jump in rents for one-bedroom flats, while Swindon and Southend on Sea (both 11 per cent) also witnessed sizeable increases.
“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 share,” Mr Goodall adds.
The figures could give buy-to-let investors confidence that one-bedroom flats are the perfect property to purchase. Rising rents can help to deliver a greater return and a higher yield.
Emma Wells, lettings director at Leaders, says if landlords are to make the most of letting out a one-bedroom flat, they should choose wisely when purchasing one.
“This means prioritising properties close to town centres, train stations and areas with good employment opportunities, which will maximise rental appeal and help to generate high rents,” she explains.
“It is also important that the flat that is well-presented, boasts a modern kitchen and bathroom and has stylish, neutral décor. This will help to ensure it appeals to the widest possible market.
“One-bedroom flats are undoubtedly a good investment opportunity. They are typically among the cheapest properties on the market so are most affordable to landlords, yet a healthy yield from this relatively small outlay is still achievable. This makes them a great option for new landlords and those looking to add to an existing portfolio.”
However, it is not only one-bedroom apartments that are experiencing large rent increases at the moment, with three-bedroom properties achieving a 4.8 per cent rise in the year to September. Across all property types, rents went up by 3.7 per cent in the year in question.
For advice you can trust on all aspects of buy-to-let investment and letting a property, please contact your local Leaders branch.