Landlords should look north of London for rental growth
The average rent for a property in the UK grew by 0.96% in the year to April, as slow rents in London (0.66%) continued to weigh down on otherwise resilient rental growth in the rest of the UK (1.11%), according to the latest Landbay Rental Index, powered by MIAC.
For landlords with an eye on higher rental growth, looking north of London, or even England, may reap rewards. Scotland has the highest year-on-year rental growth at 1.78% – the average rent is £750, only a little less than the UK’s average discounting London (£773).
Edinburgh City has the highest rental growth of any geography in the UK, with growth of 5.44% year-on-year. Glasgow City also has high growth of 2.59%, as does East Lothian (2.21%).
Wales has the second highest growth in terms of countries (1.26%), but has lower rents of £658 on average. Merthyr Tydfil has the second highest rental growth in the UK (4.65%) while Blaenau Gwent comes in third (3.92%). Interestingly, no Welsh region features in the thirty areas of lowest annual rental growth in the UK.
In England, Nottingham boasts the highest rate of rental growth at 3.84%. Rutland and Leicester (2.56% and 2.33% respectively) are additional reasons for landlords consider widening their search north of London in the hunt for above average growth. In fact the East Midlands has a higher growth rate as a region (1.98%) than Scotland.
Of course, there are some anomalies to the north of London rule. North Somerset and South Gloucestershire in the South West both have above average growth of 2.39% and 2.25% respectively, leaving the average growth for the region at 1.24%.
In general, landlords looking for rental growth in London may struggle, with average growth of just 0.66%. Average rent in the Capital stands at £1,906; this has a huge impact on the UK. Average rent nationwide is £1,218, but without London this falls to £773. For those determined to find rental growth in London, Islington may be the best bet, with year-on-year growth of 1.64%. Wandsworth saw growth of 1.43% and Southwark of 1.35%; this is especially impressive compared to areas who have seen rents fall such as Kensington and Chelsea (-0.21%) and Westminster (-0.02%).
John Goodall, pictured, CEO and co-founder of Landbay said:
“Landlords can rest assured that there is decent rental growth to be found across the UK, particularly if they look north of London. On the face of it, landlords have had a tough time in the past few years, from increased regulatory pressure to a significant increase in stamp duty costs, yet they have managed to shoulder many of these costs without passing them onto tenants. For brokers, this provides them with the opportunity to give expert advice to their clients about changing elements of the housing market and which areas have the most potential in the coming months.”