Rental growth in the UK led by the East Midlands in year to February 2018
Rents are growing at different rates in the UK according to location with those in the East Midlands recording the fastest pace of rental growth in the 12 months to February 2018 with a rise of 2.24%.
But overall rents nationally were up just 0.69% year on year to an average of £1,199 per month but this disguises considerable regional variations, according to the latest Landbay rental index.
In the East Midlands rents increased three times faster than the UK average, led by a 3.42% rise in Leicester and a 3.3% rise in Nottingham. But Scotland, Wales and Northern Ireland are outperforming England, the data shows.
Rents in Scotland increased by 1.29% year on year to an average of £732, while in Northern Ireland they climbed 1.47% to £568 and in Wales by 1.45% to £646. When London is excluded the average annual growth is 1.27% to an average of £761.
The region with the second fastest pace of rental growth is the East of England, where rents grew by more than twice the UK average at 1.58%, led by Peterborough with a rise of 2.99%. Cambridgeshire saw growth of 2.24% but in Luton rents fell by 0.13%, having been among the fastest growing locations at this point last year with growth of 4.83%.
Even with the rapid growth, renting remains more affordable in both the East Midlands at an average of £626 and the East of England at £910 than the average across the UK. In London rents remain, on average, 2.5 times greater than those across the rest of the UK at £1,878 while rents in the South East at £1,053 are also well above the average.
‘With its more affordable rents, the East of England is seemingly becoming an increasingly attractive buy to let region and as a result greater competition is driving up rents,’ said John Goodall, chief executive officer of Landbay.
However, he pointed out that landlords hoping to capitalise on high demand in the East should pay close attention to the number of bedrooms in the property before making their purchase. Demand for two bed homes, for example, appears to be severely lagging other sizes.
‘At a national level, an uplift in rents has been on the cards for a while and is likely to continue into 2018. The Prime Minister has this week vowed to get tough with property developers who sit on planning permissions, but if we truly want to control rental and house price growth we need to build more homes, not just plan them,’ Goodall explained.
‘Areas in the East Midlands and East of England, such as Leicester and Nottingham, where rental growth is reaching particularly unsustainable levels, should be the prioritised focus for the Government, developers and landlords,’ he added.