The latest data and analysis from Landbay has shown that the average rent for a property in England grew by 0.64% in the year to April, as falling rents in London continued to weigh down on otherwise resilient rental growth in the rest of England.
According to Landbay's report, hotspots for rental growth over the last 12 months include Leicester (3.02%), Nottingham (2.96%) and Northamptonshire (2.44%), with eight of the top ten ‘rental risers’ situated in either the East Midlands or East of England. The two regions, as well as the South West, continue to lead the way in terms of rental growth, with annual increases of 2.06%, 1.50%, and 1.54% respectively.
Six London boroughs feature in the UK’s bottom ten ‘rental fallers’ over the past year, including Kensington and Chelsea (-1.40%), Kingston upon Thames (-0.98%), Hammersmith and Fulham (-0.81%), Tower Hamlets (-0.79%), Barnet (-0.69%) and Harrow (-0.68%), and in total half of the London boroughs (17 out of 33) have seen rents fall year on year. Meanwhile, Bexley (1.37%), Havering (1.30%) and City of London (1.19%) have all seen rents rise by more than 1%, with just six boroughs exhibiting growth ahead of the 0.64% average in England.
The average rent paid for a property in England now stands at £1,232, or £768 if you exclude London. The lowest average rent is found in the North East (£552), where rents have shown very modest long-term growth over the past five years, increasing by just 1.8% during this time. Despite a year on year increase of 0.26%, rents in the North East have been falling since the start of 2018.
John Goodall, CEO and co-founder of Landbay said: “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.”