The DPS Rent Index is here!

Our position as the largest provider of deposit protection in the UK gives us a unique insight into trends in the Private Rented Sector (PRS). This is why we’re delighted to announce the launch of The DPS Rent Index. We’ve worked with leading economists, Professor Joe Nellis and Professor Catarina Figueira, to develop the Index, which has the capacity to inform the rental housing market and shape both public policy and investor decision-making, in the same way that house price indices do for the owner-occupied housing market.

We wanted to create a rent index that stands up to scrutiny and the highest standards of analysis, so we turned to experts with prior experience of creating complex statistical models that illuminate a market. Professors Joe Nellis and Catarina Figueira are leaders in their area and this provides the assurance we believe an index of this stature and importance requires. Indeed, Joe was co-developer of the Halifax and Nationwide House Price Indices.

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We've created The DPS Rent Index using a unique database drawn from 10 years of deposit protection in England and Wales, plus data from our sister schemes, LPS Scotland, and LPS Northern Ireland. The database is the largest of its kind, which makes it the most reliable indicator of rental trends.

So what do the latest figures actually show?

Over the last 10 years, there has been a continuing trend of rents increasing across the UK year on year, despite the global financial crisis (GFC). This saw London’s 3.47% compound annual growth rate (CAGR) representing the biggest regional increase and the 1.12% CAGR experienced in the North East as the smallest.

The average UK rent in the third quarter of 2017 was £775.13, which is £157.69 (25.5%) higher than it was a decade ago, and now represents a third (32.59%) of median monthly salary. Throughout this period, the PRS has continued to grow and is forecast to represent 25% of all UK housing stock by 2020.

The Brexit Factor

However, there are indications that rent growth has slowed since the Brexit vote, with average UK rent only increasing by 1.51% annually (comparing Q3 2017 to Q3 2016), significantly slower than the previous three years and lower than average CAGR for the last decade (2.30%). Average rent also increased at a slower rate than inflation, which was 2.7% for the same period and, for the first time since the GFC, the average UK monthly wage grew faster than rent.

What else has played a part?

A ban on landlords and letting agents being able to charge fees to tenants for renting a property has been proposed and is expected to come in to force by the end of 2018. This has led to widespread industry speculation over whether this will increase rents as landlords look to recoup costs. As a result of The DPS Rent Index, we will now have a clear indication of how rents change over time in every part of the UK, allowing for a better informed view on how the PRS is affected by such changes – and how other economic factors relate to the cost of renting across the country.

Julian Foster, Managing Director here at The DPS, said: “Figures suggest that the rental market has slowed nationally since the third quarter of 2016, and letting agents, landlords and tenants will be keen to see whether this trend continues over the next year.

“This post-Brexit increase is the smallest witnessed since 2012 and comes after three years of particularly high growth, suggesting the influence of other macroeconomic factors such as housing, employment and inflation.

While we're still some distance from seeing the roughly 3% fall that came with the last GFC, the change over the last year identified by the index represents a significant shift for the market.”

You can read the full report here. Watch this space for further updates.

The DPS – a year in review

Undoubtedly the hottest topic on the property pages has been the rapid rise of the private rented sector. Monthly rental values soared and tenant population increased as the housing market struggled. Letting agent Haart released figures in December 2011 that showed a 10% increase in the number of people registering with them over the last 3 months – a trend they expect to continue this year.

Activity at The DPS over the last year has also increased in line with this report. Since April 2011, monthly registrations and deposit submissions have been higher than last year. Here are some of the highlights:

›  Nearly 1 million deposits repaid since scheme launch in 2007

›  825,000 deposits worth £644 million currently protected on behalf of 166 organisations, 280,000 landlords and letting agents.

›  191,000 enquiries through Emma, our online virtual agent

›  69,000 text message reminders sent

›  50,000 deposit submissions in September – always a peak month but this was 4,000 more than 2010.

›  6,000 new landlords in August - 500 more than in 2010

›  600 adjudications completed in November – twice as many as last year but you’d expect this rise as the scheme matures

›  450 new letting agents in October

The DPS has the infrastructure and capability to easily deal with any rise in registrations, submissions, repayments and adjudications. With a new look website launched late last year and several new features that make deposit protection even easier for those landlords and tenants who are new to deposit protection, we’re more than ready to cope with further increases expected in 2012.

A landlord’s work is never done…

Landlords and letting agents never rest, particularly when there is so much demand on rental property and it seems several didn’t even take a break over Christmas and New Year.

›  We registered 5 new landlords on Christmas Day and a further 59 on New Year’s Eve.

›  15 deposits were submitted on Christmas Day and another 187 on New Year’s Eve

›  The latest deposit submitted on Christmas Day was at 23:09. On New Year’s eve, the last deposit was registered just in   time for fireworks and champagne at 23:41!

The year ahead…

We’re all very excited about taking deposit protection to Scotland this year and are currently awaiting approval from the Scottish Government to launch The LPS Scotland. We’re expecting this to be in April this year, so if you have rental properties in Scotland, get familiar with the requirements on the website and blog.

On behalf of everyone at The DPS, I wish you all the best for 2012.

The DPS shows 10% growth as rates stay low

We’ve seen a marked increase in landlords and letting agents registering with us over the last three months. The largest increase in landlord and letting agent registrations came in May, with an 11 per cent increase over the same period in 2010. June and July also saw increases of 10 and 8 per cent in registrations over last year respectively.

There are now 22,000 letting agents and 250,000 landlords registered with our scheme which safeguards 760,000 tenants’ deposits worth £590 million.

It’s not surprising that there’s been a considerable increase in registrations over the last few months. With bank rates likely to remain low for the foreseeable future even landlords and agents with very large property portfolios are turning to us for free deposit protection rather than pay the fees charged by the insurance schemes.

This is also representative of the growing number of landlords forced to rent their properties rather than sell them, often to tenants who have been priced out of the buyers’ market.

The increased demand for rental properties means higher rents and larger deposits. It’s therefore more important than ever to ensure that landlords are protecting deposits as there is so much more at stake.

The increase in registrations is also testament to how easy it is to use our service. It takes a matter of seconds to create an account online and only a few minutes to submit a deposit – which is ideal for new landlords who have fallen into the role by circumstance.

If you'd like more information about The DPS, visit our website.

A night of glamour and success at the Property women awards!

I had the pleasure of the company of many lady landlords at last Thursday’s Women In Property awards in London. The DPS was one of the sponsors, so I dug out my tux and headed off to congratulate the many and deserved award winners. It never ceases to amaze me what lengths really good landlords and ladies will go to to help their tenants out. This year’s overall winner, Juliet Ashton-Taylor, even goes so far as to keep one of her rooms at a knock-down price for someone who needs a helping hand in putting their life back on track. Another lady, Fiona Macaskill, plants fruit trees and vegetables in the gardens of her properties for her tenants to use. We often hear about the ‘rogue’ side of the industry, but I thoroughly enjoyed the opportunity to spend some time listening to what the best landlords and letting agents do. Well done to all of this year’s winners. http://www.propertywomenawards.org.uk/winners2010.aspx

The DPS welcomes Government move to safeguard more tenants’ deposits

The decision from the Government to bring tenancies worth up to £100,000 per year under the tenancy deposit legislation is a great one. Tenancy deposit legislation previously only covered Assured Shorthold Tenancies up to £25,000. Tenancies valued higher than this had no requirement to be protected under a deposit protection scheme.

However, from October this year, deposits up to £100,000 will also need to be protected. This closes a loophole that, since the legislation came into force in 2007, left many of the most vulnerable tenants, like students or large house-shares, with no protection. 

It’s a common assumption that people living in high value rental properties are rich and successful, but this is often not the case.

Students, for example, will form groups and move into large houses, paying a combined rent that easily exceeds £25,000 annually. People working hard to get through university should be given the same protection as young professionals or families renting a smaller house.

The Government move to expand the deposit protection scheme is the right thing to do and it’s estimated to bring another 15,000 new tenancies under the umbrella of deposit protection.

The DPS will have no trouble coping with this increase in deposits – we’re wholly confident that we will deliver a smooth service for landlords and tenants and can offer total protection for all deposits.

Titillating Tales of Tenants’ Secret Lives

The DPS has today published details of the most bizarre items tenants have left behind when they leave a property. Some of the stuff makes the mind boggle.

Sex toys, saucy underwear and bondage equipment were all cited in our poll of over 1000 landlords.

It wasn’t just sex toys being forgotten. One landlord told us that he walked into the property to find all the plants from the garden had been dug up and left in the living room; another told us their tenants had left a boat in the front room, complete with trailer and one tenant even left the engine from a lorry in their sitting room!

Tenants also left heaps of rubbish and mess while others left animals including parrots, snakes and a lizard. Our top ten list of bizarre items makes interesting reading:

1. Sex Toys 2. An elephant’s foot 3. Ashes of a dead person 4. A pot bellied pig 5. A box containing nail clippings 6. A crash test dummy 7. A pair of synthetic breasts 8. A glass bowl covered with cling film containing 17 live spiders 9. A plastic hand with a fork attached 10. 7 cans of gravy granules

Who would have thought someone would need so many cans of gravy? I think the results show there is plenty of stuff going on behind people’s closed doors that we don’t know about and if this is what they leave behind, what are they taking with them?

But there is a serious point too.

Tenants should remember to leave their property in good condition at the end of a tenancy. If there is damage to a property or items on the original inventory are not left behind it could reduce a tenant’s chances of getting their deposit back.

Since 2007, landlords have been obligated under law to register their deposit with one of the three tenancy deposit protection schemes. As the only government accredited custodial scheme, we are completely free and landlords can register and make deposit payments any time of the day. It makes sense for landlords to register their deposits with us.

If you are a landlord and your tenant has left behind some strange items we would love to hear from you, so leave us a comment. If there is anything that could beat an elephant’s foot or a pot bellied pig I would be very surprised and like to know!