Residential Rental Price Indexes

By Chris Courtis

What Factors may Influence the Rental Market

Like any property market the rental market prices will fluctuate depending on a number of different factors. These influences can depend on supply and demand factors, are there more properties than demand, this can have a major impact on prices. If there is more available property than the demand for rental houses then it is inevitable that the better quality property will be in demand, plus this can have a factor on the price of these properties. Also if there is less property than demand then this can force the rental prices up for the available property. Other factors can depend on interest rates and mortgage prices as to whether landlords keep their rental property or sell the property in order to cash in on higher house prices.

Moving to a New Area

If you are moving to a new area the prices can be vastly different from where you are moving from. Factors can be the area that you are moving to within the country and as discussed earlier the supply and demand of property within the area. A good way to try to gauge the prices is to use a rental price index. There are a number of different sites that can supply data for this area, one is the RRPI (Residential Rental Price Index) this uses data from letting agents throughout the UK and provides a breakdown of prices not only for individual towns but also for property types. Therefore no matter what type of property that you are interested in you can get a guideline of the price that you may expect to pay.

Take a look at the RRPI by clicking here: - Residential Rental Price Index

How Accurate are the Rental Price Indexes

Normally they are fairly accurate; there are a number of factors that need to be taken into consideration which include the number of property that make up the index, the accuracy of the data that is provided in order to calculate the index. Usually the calculation for the pricing will be the total price of all the property divided by the number of properties.

For example if there are 80 4 bedroom properties used to make up the index all advertised at £1200 then the average rental price for a 4 bedroom house will be £1200.

Other factors to take into consideration are that the prices are advertised prices and not actual rented prices and will include all property in all areas and conditions. It is important to remember that these should only be used as a guideline and prices in certain areas of a town may be higher due to the location and demand of property compared to another area in a town.

Summary

In summary remember that the residential rental price index is only to be used as a guideline for property in a town as a whole and there are external factors that can influence the figures. Remember that they are advertised prices and not rented prices and you can still get property for less than the average price and make a deal with the letting agents in order for you to secure your perfect rental home.

Chris Courtis is the co-fonder of the Rentright Rental Property Portal. The RRPI is part of the Rentright website and the residential rental price index of property advertised on the Rentright website. All date is updated in realtime from roperty advertised on the site. Visit the RRPI to see more.

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