Falling rents in London ‘distorts’ picture for the rest of England, Index shows
The average rent for a property in London fell 0.27% in the year to April, weighing down the resilient rental growth in the rest of England (1.19%), according to the latest Landbay Rental Index.
The East Midlands and areas in the East of England dominated the top ten ‘rental risers’, with Leicester (3.02%), Nottingham (2.96%) and Northamptonshire (2.44%) revealed as hotspots for rental growth over the last 12 months.
These two regions, along with the South West, saw annual increases of 2.06%, 1.50% and 1.54% respectively.
Meanwhile, the UK’s bottom ten ‘rental fallers’ over the past year featured six London boroughs, including Kensington and Chelsea (-1.40%), Kingston upon Thames (-0.98%), Hammersmith and Fulham (-0.81%), Tower Hamlets (-0.79), Barnet (-0.69) and Harrow (-0.68). In total, 17 of 33 London boroughs have seen rents fall year-on-year.
John Goodall, chief executive officer and co-founder of Landbay, said falling rents in some parts of the country ‘distort’ the picture for the rest of England where rents are continuing to grow at a steady pace.
“Britain will always need homes, and the growing cohort of people that can’t buy, or don’t want to, will more than ever rely on the private rental sector to house them in the years ahead,” he added.
Areas such as Bexley (1.37%), Havering (1.30%) and the City of London (1.19%) have all seen rents rise by more than 1%, with just six boroughs experiencing growth ahead of the 0.64% average of England.
Currently, the average rent paid for a property in England stands at £1,232 (£768 excluding London). The North East saw the lowest average rent at £552, with an increase of 1.8% over the past five years. Despite the 0.26% year-on-year increase, rents in the region have been falling since the start of 2018.
Goodall continued: “Rental growth may not be what it used to be, but the pace of change varies wildly between regions. Prospective landlords need to be astute to maximise their profits, using variations in rental growth and yields over the past year to pick out some of the most promising regions for buy-to-let.”
“Consistent rental demand will obviously drive returns in the long-term, but by selecting the right location yields will be even greater.”