Modern rental properties command premium of 18%
New data analysis by FCC Paragon reveals that renters who want to enjoy the many benefits of living in a modern property are facing a rent price premium of up to 18%.
Modern homes come with a number of benefits, including increased energy efficiency for lower household bills, less chance of experiencing frustrating maintenance issues, and access to more modern fixtures and fittings.
The good news for renters who want a modern property is that FCC Paragon’s research shows that they account for over 40% of the current rental market.
Of the estimated 109,727 live rental listings in England, 45,563 are classed as modern, equivalent to 41.5%.
London (47.1%) has the highest proportion of modern rental homes, followed by Yorkshire & Humber (40.3%), the West Midlands (40.2%), and North West (39.6%). Meanwhile, the lowest proportion of modern properties is located in the South West (32.1%).
However, while renters have a good chance of securing a modern property, further research shows that they’re facing a significant price premium in order to secure one.
FCC Paragon found that the average rent price in England currently stands at £1,419 per month, while the average price of a modern property is £1,578 per month. This is an average premium of £159 or 11.2%.
This premium is at its largest in the East of England where the average asking rent for a modern property, £1,469 per month, is 17.7% above the general average.
The North West commands a modern property premium of 17.2%, followed by the North East (15.7%), London (14.8%), and South East (11.9%).
Managing Director of FCC Paragon, Bekki Leaves, commented:
“Modern properties provide all of the same benefits to renters that they do homebuyers, and as such they tend to be highly sought after. Because of this, prices tend to be higher than your average rented property. But we can also point towards the prime locations of many modern developments, from marinas and riverfronts through to the beating heart of city centres, to explain why renters are willing to pay more.
However, given the amount of new developments popping up across the country, new-build rental homes, from flats to detached houses, are going to account for an increasingly large proportion of the market, which means their price premium will inevitably start to level off, giving renters access to all the associated mod-cons without having to pay through the roof.”
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