According to the latest Landbay Rental Index for April, we saw the average rent for property in England grow by 0.64% during the previous 12 months. However, this resilient rental growth has been weighed down by falling rents in London.
Leicester, Nottingham and Northamptonshire have been hotspots for rental growth over the past 12 months, at 3.02%, 2.96% and 2.44% respectively. Eight of the top ten ‘rental risers’ are situated in either the East Midlands or the East of England. These two regions, along with the South West, continue to maintain top positions in terms of rental growth, contributing annual increases of 2.06%, 1.50% and 1.54% respectively.
Latest Landbay Rental Index Reveals Best and Worst Areas for Growth in England
Amongst the London boroughs, six have featured in the UK’s bottom ten ‘rental fallers’ over the last year. This includes Kensington and Chelsea at -1.40%, Kingston upon Thames at -0.98%, Hammersmith and Fulham at -0.81%, Tower Hamlets at -0.79%, Barnet at -0.69% and Harrow at -0.68%. Overall, 17 out of 33 London boroughs have seen a fall in rents year on year. However, looking at Bexley, Havering and City of London, we are seeing a rise of over 1% in rents, at 1.37%, 1.30% and 1.19% respectively. Just six boroughs in total have exhibited growth ahead of the 0.64% average in England.
In England, the average for rent paid currently stands at £1,232, or £768 if London is excluded. The North East is home to the lowest average rent, at £552. Over the past five years, rents have shown a very modest long-term growth in this area, increasing by 1.8% in total. Despite an increase of 0.26% year on year, rents in the North East have been declining since the beginning of 2018.
John Goodall, CEO and co-founder of Landbay has commented: “Falling rents in some parts of the country, especially expensive prime London locations, 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.
“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.”