Landlord News,Lettings News

Outer city rental markets continue to show stronger growth vs inner city

Em Morley - November 1, 2021

Rental homes in outer city areas have seen stronger growth over the last year, while inner city rental properties continue to command a higher monthly rental income, says buy-to-let specialist Sequre Property Investment.

Its research involved an analysis of rental market data for London, Manchester and Birmingham, revealing how it differed when comparing inner and outer city area.

Sequre Property Investment reports that inner city rental markets attract the strongest levels of monthly rent. On average across all three cities, the monthly cost of renting within an inner city area is at £1,152 versus £908 per month in the outer city market, highlighting a difference of 27% or £244 per month.

The biggest difference has been recorded in London, where rents across the inner city rental market are 37% higher on average. In Manchester there was an increase of 26% and in Birmingham it was 9%.

Looking at annual rental growth, however, it has remained largely flat in the outer city areas, while across inner city rental areas it has fallen -4.4% in the last 12 months.

Manchester has performed the strongest, with inner city rental values remaining largely unchanged in the last year, while across the city’s outer rental market values have climbed by 3.7%. In Birmingham, outer city rental values are up 2.2% versus a marginal 0.3% uplift across the inner city.

London’s rental market has struggled across the capital, with only a 1.1% increase in rental values across outer city areas and a -7.8% drop across inner city areas.

Daniel Jackson, Sales Director at Sequre Property Investment, commented: “It’s clear inner city rental markets are still struggling due to the decline in demand caused by the pandemic, despite a gradual return to normality from a social standpoint and with regard to the workplace.

“This is particularly evident across the London market, where rental values have plummeted across inner city areas, while they’ve also struggled in outer city areas. 

“The good news is that elsewhere, outer city rental values are on the up, with both Manchester and Birmingham seeing very healthy levels of growth. This suggests that tenants are now starting to make their return and this is a trend that should soon reach our city centres and help boost values across inner city rental markets.”

The current rental values for inner and outer city rental markets and the inner city rental premium

CityInner city average rent 2021 (per month)Outer city average rent 2021 (per month)Inner city rental price premium
London£1,874£1,37237%
Manchester£838£66726%
Birmingham£743£6859%
Average£1,152£90827%
Data sourced from the Office for National Statistics – Private rental market summary statistics

The current rental values for inner and outer city rental markets and the annual change across both

CityInner city average rent 2021 (per month)Inner city annual rental changeOuter city average rent 2021 (per month)Outer city annual rental change
London£1,874-7.8%£1,3721.1%
Manchester£8380.0%£6673.7%
Birmingham£7430.3%£6852.2%
Average£1,152-4.4%£9080.1%
Data sourced from the Office for National Statistics – Private rental market summary statistics