Rents in the UK’s private rented sector increased by 0.97% in the 12 months to November 2018, virtually unchanged from the level of growth at the corresponding point in 2017.
Rents in the UK’s regional hubs are growing significantly faster than both London and the UK average, particularly in the north of England, as workers continue to relocate from the capital, the latest findings from Landbay shows.
According to the buy-to-let lender, rental growth was led by Leeds where rents are up 2.54%, followed by 2.05% in Birmingham and 1.91% in Manchester.
John Goodall, CEO and co-founder of Landbay said: “The truth is there is now a twin speed rental market as London’s rent growth is dwarfed by cities such as Leeds and Manchester. This is being fuelled by the capital’s millennial exodus as countless young professionals realise there is more to life than London. This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.
“In many ways it could be argued that the ‘Northern Powerhouse’ is beginning to take effect amid stretched affordability and a harsher tax regime.”
The average UK rent currently sits at £1,212 per calendar month (pcm), up £10 since the start of the year, owed in part to London’s improved performance, recording growth of 0.58% this year.
Rents are rising in 27 of the 33 London borough, a very different picture from this time in 2017 when rents were falling in 26 of the capital’s boroughs.
When London is removed, the average rent sits at £769pcm, up from £761pcm since the start of the year.
The East Midlands (2.25%), Yorkshire & Humber (1.50%) and West Midlands (1.48%) have all experienced the most substantial growth in the past year and are expected to climb further as we head into 2019.
Growth in the North East peaked to its highest point in two years in November 2017 but since then growth has depreciated to 0.05% on an annual basis – it’s lowest growth rate since August 2013.
Every region in the UK has seen rents increase, but it is worth noting that the speed of growth has not been consistent with all areas other than London experiencing a slowdown.
Goodall added: “London’s green shoots paint a positive picture for landlords ahead of what will likely be testing economic times with Brexit and further interest rate rises expected.”