East Midlands rents are rising three times faster than the UK average, with a typical increase of 2.24% over the 12 months to February – the fastest growth of any UK region, according to the latest Landbay Rental Index, powered by MIAC.
The East Midlands has recorded the fastest rate of rent price growth of all UK regions for the past 11 months. At a county level, Leicester (3.42%) and Nottingham (3.30%) have recorded the most substantial rental growth in the region, both outstripping UK inflation, which currently stands at 3%.
There is a lot of variation in growth of East Midlands rents based on property sizes. For instance, in Leicester, rent price growth is driven by one and three-bedroom properties, with rents on these homes increasing by an average of 4.03% and 5.01% respectively. In contrast, two-bed rent prices grew by just 1.41% year-on-year, pointing to a glut of two-beds in Leicester.
The region with the second fastest pace of rent price growth is the East of England, where rents rose by more than twice the UK average (1.58%). Within the region, Peterborough (2.99%) and Cambridgeshire (2.24%) both recorded considerable growth, while, in Luton, rents dropped by an average of 0.13%, having been among the fastest growing counties at this point last year.
Even with the rapid growth, East Midlands rents (at an average of £626 per month), and those in the East of England (£910), are still more affordable than the average price across the UK.
The average UK rent now stands at £1,199 per month, a 0.69% increase on February 2017. London rents remain, on average, 2.5 times greater than those across the rest of the UK (£1,878 versus £761), while prices in the South East (£1,053) also well surpass the average.
John Goodall, the CEO and Founder of Landbay, comments: “Much like Britain’s weather, rental growth was heavily impacted by the east in February. With its more affordable rents, the east is seemingly becoming an increasingly attractive buy-to-let region and, as a result, greater competition is driving up rents. 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 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. 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.”