Rents up across most of England and Wales in September, yields stable
Rents increased in most areas of England and Wales over the 12 months to September with the strongest growth in the North West, the latest index report shows.
This took the average rent to £938, up 3.2% from the same month in 2016 while landlords have seen yields stabilise across the country over the year, according to the buy to let index from Your Move. It also reveals that rents in London and the South East continued to rise at a slower rate than elsewhere. Top growth was 3.6% in the North West to an average of £633, followed by a rise of 3.4% in the East Midlands to £646 per calendar month.
The East of England also saw reasonable growth with rents up 2.9% in the 12 months to September to an average of £880 per month. But rents fell by 2.2% in the South West to £669 and were down 0.3% in the North East to £536, the cheapest region in the survey.
While London rents are the highest in the country at average of £1,280, this headline figure continues to mask vast differences across the capital. For example, the most expensive rents are in Travelcard Zone 2, the area closest to the city centre at £1,998 and the most affordable are on the boundary of Zone 4 and 5 at £1,084. The data also shows that across all areas of London, the average price has fallen by 0.1% month on month. But it was not the only region to see a monthly fall with rents down 0.7% in the North East, down 0.5% in Wales and down 0.3% in the South East compared with August. Month on month rents grew fastest in in the East Midlands with a rise of 0.6%.
Landlords saw stable returns in September, broadly unchanged from the previous month. The South East was the only region to see returns fall month on month an average return of 3.3% in September, down from 3.4% in August.
All other regions offered the same yields as in August but are down compared to last year, with an average of 4.4% for a sixth successive month. But despite this stability, yields are still lower than a year ago. In September 2016 the average return was 4.8%. Properties in northern areas continue to offer better returns than other areas. This month the average property in the North East had a yield of 5.1%, higher than any other area in the country. The North West was the only other region to post a similar return, it had a yield rate of 5% this month
‘Once again the strongest rent growth was found in the areas away from London and the South East. As activity in the capital slows, prices and activity have risen in the North,’ said Martyn Alderton, National Lettings Director for letting agents Your Move and Reeds Rain.
‘Yield levels have started to stabilise across surveyed areas after being squeezed at the start of the year. This is good news for landlords and demonstrates the resilience of the sector,’ he added.