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North-south rent gap narrows

The north-south gap in rental prices is narrowing, as rent hikes ease in the north but pick up in the south of the country, new figures show.

Average rents in the north of England dropped by an average 0.3% in April compared with the same period last year - the first year-on-year decline in rental values since June 2014.

In contrast, rental growth accelerated in the south of England to 2.2% in April 2018, buoyed on by increases in the East of England and London, where rents are up 3.6% and 2.2% respectively.

The data provided by Hamptons International shows that rents in the south increased to an average of £1,372 per calendar month (pcm) last month,  2.2 times more than the average rent of £622pcm in the north.

The Hamptons International Monthly Lettings Index (formerly the Countrywide Lettings Index) also shows that the  average cost of a new let reached £953pcm in Great Britain in April, 1.9% up on the corresponding period last year.

The data from Hamptons shows that since April 2016 landlords have sold 82,000 more homes than they bought in the south, compared to 24,000 net sales in the north, contributing to an overall fall in the number of homes available to rent across Great Britain.

Aneisha Beveridge, research analyst at Hamptons International, said: “Low stock levels in the south continue to drive rental growth as tenants compete for fewer available homes. 

“Since April 2016, the month the stamp duty surcharge was introduced for second homeowners, landlords across Great Britain have sold 88,000 more homes than they bought.  But landlords are finding new ways to maximise their returns by purchasing properties elsewhere, particularly further North in search of lower stamp duty bills and higher yields.

“Across Great Britain rental growth picked up last month to 1.9%, with the East being the top performing region (3.6%). 

“London has seen a reversal of fortunes with rental growth averaging 2.7% so far this year compared to -2.0% in the same period last year.  This growth has been driven by inner London with average rents rising 4.1% so far this year.”

North/South rents and stock levels

 

Average Rent (pcm)

Rental Growth YoY

Change in the number of homes available to rent levels (Apr 18 v. Apr 16)

North

£622

-0.3%

19%

South

£1,372

2.2%

-16%

Great Britain

£953

1.9%

-5%

Source: Hamptons International

New Lets (pcm)

 

Apr-18

Apr-17

YoY

Greater London

£1,673

£1,637

2.2%

    Inner London

£2,597

 £2,549

1.9%

    Outer London

£1,497

 £1,464

2.3%

South East

£1,034

 £1,014

1.9%

South West

£786

 £777

1.2%

East

£946

 £913

3.6%

Midlands

£671

 £656

2.4%

North

£622

 £623

-0.3%

Scotland

£584

 £617

-5.3%

Wales

£656

 £634

3.4%

Great Britain

£953

 £ 935

1.9%

Source: Hamptons International

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