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Where are rents rising fastest?

Rents in the residential property sector are continuing to rise across many parts of the UK with no fewer than 20 areas seeing growth of more than 3% in the last 12 months, according to fresh figures.

Luton is the area with the fastest growing rents with a rise of 6.5%, followed by Northamptonshire up 5.1%, Peterborough up 4.8% and Edinburgh up 4.6%, the Landbay rental index shows.

Other areas to see high rental price increase include Medway up 4.5%, Bedfordshire up 4.6%, Thurrock up 4.4%, Bristol up 3.62%, Swindon up 3.31%, Nottingham up 3.25%, Leicester up 3.1%, and Greater Manchester up 3.06%.

Overall rents in the UK remained virtually unchanged at an average of £1,189pcm in January compared with the previous month, but were just over 1% higher when compared with the corresponding month last year. But in London while the average rent is £1,883pcm, this is down 0.42% year-on-year.

Of the 20 locations identified in Landbay’s index report as posting annual rental growth of more than 3% year-on-year, the analysis found that tenants in nine of the 20 areas are currently spending over 60% of their take home pay on rent.

Tenants in Luton, for example, currently spend an average of 68% of their disposable income on rent, with tenants in Brighton and Hove, Bristol and Thurrock spending an average of 69%, 64% and 63% respectively.

John Goodall, CEO and founder of Landbay said: “There are currently 4.3 million tenants in the private rented sector but affordability is becoming an issue across many parts of the UK. Whether tenants are renting as a stepping stone on the way to home ownership or, increasingly, renting for life, people rely on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable.”

Goodall believes that the government’s focus on supplying more rental properties, as illustrated by last week’s housing white paper, suggests that the private rented sector may “finally be given the investment it needs to keep rents in check”. 

He added: “Further institutional investment in large scale developments, specifically designed to rent rather than buy, should go some way to professionalise the sector, improving living standards and helping control further rental growth.

“While PRS schemes are already on the way in many of the areas facing the fastest pace of rental growth, the government’s white paper missed an opportunity to highlight where in the country this type of investment is needed the most. For those in the top 20, experiencing rental growth above 3% a year, the clock is ticking.”

Area

YoY growth

Av. Rent Jan '17

Av. Rent Jan '16

Extra rent paid

Avg disposable income

Annual rent 2017

% of household disposable income

Luton

6.52%

779.48

731.74

572.87

£13,775

9,354

68%

Northamptonshire

5.05%

709.00

674.91

409.03

£17,670

8,508

48%

Peterborough

4.78%

620.10

591.79

339.70

£16,097

7,441

46%

Edinburgh City

4.60%

986.39

942.99

520.80

£19,481

11,837

61%

Medway

4.56%

798.77

763.95

417.78

£17,059

9,585

56%

Bedfordshire

4.46%

771.30

738.34

395.48

£18,495

9,256

50%

Thurrock

4.40%

850.13

814.29

430.16

£16,157

10,202

63%

Bath and North East Somerset

3.67%

947.72

914.18

402.52

£19,093

11,373

60%

Bristol

3.62%

895.77

864.48

375.49

£16,887

10,749

64%

South Gloucestershire

3.32%

786.65

761.40

303.05

£19,093

9,440

49%

Swindon

3.31%

697.80

675.45

268.19

£17,790

8,374

47%

West Lothian

3.30%

739.82

716.20

283.51

£16,382

8,878

54%

Nottingham

3.25%

638.98

618.84

241.66

£12,702

7,668

60%

Rutland

3.22%

615.22

596.05

230.01

£17,805

7,383

41%

Middlesbrough

3.19%

505.54

489.91

187.62

£18,056

6,067

34%

Leicester

3.19%

624.19

604.89

231.61

£12,071

7,490

62%

Wiltshire

3.12%

712.79

691.21

258.93

£19,242

8,553

44%

Brighton and Hove

3.09%

1,074.17

1,041.94

386.78

£18,685

12,890

69%

Greater Manchester

3.06%

660.14

640.51

235.53

£15,131

7,922

52%

Stirling

2.96%

746.17

724.74

257.16

£18,690

8,954

48%

UK Rental Index

JAN 16

YoY %

MoM %

Av. £

UK

1.08%

0.06%

1,189

England

1.06%

0.06%

1,221

Scotland

1.26%

0.08%

721

Wales

1.43%

0.15%

635

London                    

-0.42%

-0.04%

1,883

UK without London

1.92%

0.12%

750

UK Rental Index by number of beds

One bed

Two bed

Three bed

YoY %

MoM

%

Av. £

YoY

%

MoM

%

Av. £

YoY

%

MoM

%

Av. £

UK

0.94%

0.07%

1,012

0.95%

0.06%

1,151

1.31%

0.06%

1,318

England

0.89%

0.06%

1,046

0.91%

0.06%

1,186

1.33%

0.06%

1,339

Scotland

1.27%

0.11%

545

1.28%

0.08%

686

1.02%

-0.05%

1,104

Wales

2.17%

0.34%

541

1.31%

0.05%

650

1.09%

0.06%

607

London               

-0.30%

0.00%

1,456

-0.69%

-0.03%

1,928

-0.22%

-0.10%

2,688

UK without London

1.96%

0.11%

592

1.81%

0.10%

707

1.83%

0.11%

815

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