Modern PRS homes in England carry an 18% rent premium

Tenants seeking a modern home in England face a substantial rent premium of up to 18%, with monthly rents for these properties averaging £1,578, compared to £1,419 for standard rentals.

That’s according to FCC Paragon’s latest findings which found the £159 difference represents an 11.2% premium, with some regions seeing hikes as high as 17.7%.

Modern homes, defined by superior energy efficiency, fewer maintenance headaches and updated fixtures, make up 41.5% of England’s rental listings, totalling 45,563 out of 109,727 properties.

New homes sought after

The firm’s managing director, Becci Leaves, said: “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.”

She added: “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.”

Steepest premium in the East

London leads with 47.1% of its rentals classified as modern, followed by Yorkshire and Humber (40.3%), West Midlands (40.2%), and the North West (39.6%).

The South West lags behind at 32.1%.

The East of England sees the steepest rent premium, where modern rentals average £1,469 per month, 17.7% above the region’s norm.

The North West follows at 17.2%, with the North East (15.7%), London (14.8%), and South East (11.9%) also showing significant mark-ups.