The pre-referendum slowdown in the market has all but ended with rents in England and Wales reaching record highs. Rental properties now command an average of £887 per month, the highest figure ever recorded by Your Move. There is a certain seasonal influence underlying this growth, caused by an increase in the student sector during the summer months. This is particularly noticeable in London, the South East and the North East.
Rents in August 2016 rose by 8.7% compared to August 2015, the Your Move England & Wales Buy to Let Index found. This is in stark contrast to June, the month of the referendum, when the average rent shrank by 2.4%
London and the South East are driving the 8.7% growth, although it is still, on average 30% cheaper to rent in the SE than in London.
While London has long been the centre of the UK’s rental scene, other areas of the country are now matching and even out performing the capital city, Your Move found.
Rents in the London grew 6.9% in the last 12 months to reach an all-time high level of £1,391. However, this performance was bettered by the South East where rents reached £975 per month in August. Data suggested this increase in the South East was buoyed by students moving into new rental properties ahead of the new university year. Rent increases are not expected to maintain this level of growth to the end of the year.
Other regions to outperform the capital included the North East.
This region saw rents up 12.3% in the same time period and properties in this area now let for an average of £583 per month. The North East has provided many popular locations for investors, encouraged by low house prices and strong returns on their investment. Yorkshire and the Humber (£580 per month) is the cheapest place to rent in England and is just 42% of the cost of renting in London.
On a monthly basis all but two areas saw rents increase between July and August. This suggests that the UK’s decision to leave the European Union continues to have little short-term impact on the rental market. Across all regions of England and Wales rents increased by an average of 4.8% month-on-month.
The data revealed that in the capital, rents have reach all-time high of £1,391. Rents in the SE continue to rise at a faster pace than London and now stand at £975
Adrian Gill, Director of lettings agents Your Move comments: “The rental market appears to have left any uncertainty about the market behind with prices across England and Wales again reaching record highs. London continues to be home to the highest rents but other areas such as the North East and South East are witnessing even stronger levels of growth over the year – demonstrating the seasonal impact of the student market.”
Yields have picked up following a gentle decline in recent months, something which landlords will no doubt watch with interest over the next couple of months.”
