The gap in rental prices is narrowing, as rent hikes ease in the north but pick up in the south.
New figures show that average rents in the north of England dropped by an average of 0.3% in April, compared with the same month last year. This makes it the first year-on-year decline in rental values since June 2014.
By contrast, rental growth accelerated in the south of England by an average of 2.2% during April 2018. This has been mainly due to areas in the east of England where rents have gone up by 3.6% and London, where rents have increased by 2.2%.
This works out that rents in the south increased to an average of £1,372 per calendar month (pcm) last month. This is 2.2 times higher than the average rent of £622 in the north of the country. When combined into an average for the whole of the UK, this comes to £953pcm. This makes it on average, up by 1.9% since the same period the previous year.
This data has been provided by Hamptons International, in their Monthly Lettings Index (which was formerly the Countrywide Lettings Index).
Scotland and Wales
In Scotland, average new let prices were down by 5.3% from the previous April, at £584 per month. In Wales, rents increased by 3.4% to reach an average of £656 on average per month.
Hamptons said that, following the introduction of a stamp duty hike for second home owners in 2016, which includes buy-to-let investors, the supply of homes available for rent in the south has fallen, while in the north it has remained more resilient.
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.”
Results from the Index
North/South Rents and Stock Levels:
|Average Rent (pcm)||Rental Growth YoY||Change in the number of homes available to rent levels (Apr 18 v. Apr 16)|
|April 2018||April 2017||Year-on-Year|
|Great Britain||£953||£ 935||1.9%|