Latest figures released from Countrywide have revealed that rental growth in Britain has cooled over the last year.
However price growth in Northern locations has remained fairly constant. In fact, of the 20 largest UK cities, the five that have seen the price of a new let rise the fastest are all in Northern England or Scotland.
Investors recently taking out landlord insurance in Manchester will be pleased to note that rents for new lets in the city have risen by 7.1% over the last year. This was faster than anywhere else in the UK and over three times greater than the average.
The rest of the top five was made up of York, Leeds, Liverpool and Glasgow, which have all seen rate of rental growth increase during the last quarter.
On the other hand, cities in the South have largely seen rental growth ease during 2016 to date, with seven of the ten slowest locations for rental increases in this region. Oxford, Cambridge and London have seen the greatest slowdown.
This could be due to increased price sensitivity, with the proportion of landlords lowering asking rents doubling during the last year in the South. Cambridge (18%) and London (17%) saw the greatest number of landlords lowering rents.
More rental properties coming onto the market following April’s 3% stamp duty hike have given tenants more choice and has eased rental growth as a result.
Regionally, the rate of growth has slowed across the country, sliding from 2.8% in September 2015 to 2.2% this year. Rents are increasing at a slower at rate than last year in eight of the eleven regions investigated.
The slower rate of growth evident in the South has seen the gap between North and South narrow by 4.6% over the course of the year. However, the gap is still 26% greater than in 2010.
Johnny Morris, Research Director at Countrywide, noted: ‘A different type of two speed rental market is emerging, with falling stock and growing demand driving rental growth in many Northern cities at a higher rate than those in the South. With London rents growing at the slowest rate since the downturn and Northern cities recording rent rises three times as large as their Southern counterparts, there are signs that the North-South rental divide is starting to close.’
‘As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost to the rental market. Overall this is yet to stoke rental inflation, but September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends, 2017 could be the first time since the 1930s that more homes are let than sold,’ Mr Morris added.