The latest data and analysis from Hamptons International has revealed that during April the average cost of a new let in the North fell for the first time in four years.
Rents in the North fell -0.3% in April 2018 compared to the same period last year, meanwhile rental growth accelerated in the South to 2.2%. Across Great Britain average rents rose 1.9% year-on-year in April to reach £953 pcm.
The average cost of a new let in the South rose to £1,372 pcm in April, 2.2 times more than the average rent in the North (£622 pcm).
Since April 2016 when the stamp duty surcharge for second homeowners was introduced, the number of homes available to rent has fallen in the South, but stock levels have been more resilient in the North. Last month there were 19% more available homes to rent in the North than in April 2016, compared with -16% fewer homes available to rent in the South.
Since April 2016 landlords have sold 82,000 more homes than they bought in the South, compared to 24,000 net sales in the North. As a result, in April 2018 there were 5% fewer homes available to rent across Great Britain than in April 2016.
Rents in the North East have been falling for the last five months, meanwhile stronger rental growth in the South was spurred on by the East (the top performing region last month) and London where rents rose 3.6% and 2.2% respectively. In the capital, rental growth slowed in inner London to 1.9% whereas rents increased 2.3% in outer London.
Rents rose in six out of eight regions, with Scotland (-5.3%) recording the third consecutive month of falls. The North (-0.3%) was the only other region to record falling rents. Meanwhile Wales saw the second fastest rental growth across Great Britain with the average cost of a new let rising 3.4% year-on-year in April. Average rents in the Midlands grew 2.4% over the month.
Aneisha Beveridge, Research Analyst at Hamptons International, said: “Low stock levels in the South continue to drive rental growth as tenants compete for fewer available homes. Since April 2016, the month the stamp duty surcharge was introduced for second homeowners, landlords across Great Britain have sold 88,000 more homes than they bought. But landlords are finding new ways to maximise their returns by purchasing properties elsewhere, particularly further North in search of lower stamp duty bills and higher yields.
Across Great Britain rental growth picked up last month to 1.9%, with the East being the top performing region (3.6%). London has seen a reversal of fortunes with rental growth averaging 2.7% so far this year compared to -2.0% in the same period last year. This growth has been driven by inner London with average rents rising 4.1% so far this year.”