All change! Rent gap between City and Country narrows dramatically
The gap between typical City rents and Country rents is closing according to an analysis of Countrywide properties by the company’s upmarket Hamptons International brand.
In October the average cost of a newly let property in Great Britain as a whole rose to £1,041 pcm, up 1.4 per cent on the same month last year.
This is the first annual increase since March 2020 but unlike last year, it is properties in the countryside rather than urban areas driving rental growth.
The average cost of a newly let property in the countryside rose to £919 pcm in October, up 5.5 per cent compared with the same period last year and more than triple the average rate of growth across Great Britain.
Meanwhile rents in cities fell 5.3 per cent year-on-year to £1,336 pcm.
Hamptons says this is a complete reversal of October last year when rents in cities were rising 7.2 per cent and falling in the countryside by 0.2 per cent.
October 2020 rents in smaller towns and suburbs rose 2.2 per cent year-on-year.
The Hamptons data appears to back up the popular belief that the Coronavirus pandemic has changed tenant behaviour, with many moving out of cities to suburbs and rural locations.
There were seven per cent fewer applicants looking to rent in cities last month, but 29 per cent more homes available to rent than at the same time last year. This has put downards pressure on rents.
Meanwhile demand for homes in the countryside rose four per cent in October and stock levels were 48 per cent lower than the same period last year.
This shift in demand has also changed agents’ and landlords’ ability to increase rent.
Nearly half of those letting a home in the countryside were able to increase rent when re-letting their buy-to-let last month. This figure dropped to 35 per cent for landlords in city locations.
On a regional basis, rents outside London continued to accelerate, with prices in the North of England reaching a record high of £689 pcm in October, up 5.9 per cent on the same period last year.
This set a new record for average rents in the three Northern regions (North West, North East and Yorkshire and Humber), as well as the highest rate of annual growth since the Hamptons index began.
Rents in the South West also increased 5.9 per cent year-on-year, marking the strongest growth since October 2015.
Meanwhile London and Wales remained the only regions where rents fell – down 0.6 per cent in the capital.
“The flexibility of the rental market has meant that while some renters have decided to make a permanent move out of cities in search of more space, others have moved out temporarily. The opportunity to work from home means tenants can save while paying less rent in more rural areas. As a result, the gap between rents in cities and the countryside is closing” explains Aneisha Beveridge, head of research at Hamptons International.