Across the last year, both house prices and rents have risen almost everywhere in the UK. This is good news for buy to let investors and should provide encouragement for the rest of 2019.
The Land Registry’s latest UK House Price Index, covering February 2019, shows that the average UK house price has risen to £226,234 in the last year. The average price in England is even higher at £242,964. Whilst there was the normal slight fall in prices just after Christmas, the annual rises are the bigger picture.
Within England, areas such as the North West (1.3%) and the East of England (0.5%) saw a monthly rise from January 2019 even when taking the time of year into account, and the former also experience the biggest annual rise at 4%.
Most types of houses – detached, semi-detached and terraced – saw solid monthly price growth of up to 2%, showing why investors are so keen on them. In addition, new build houses outperformed existing homes when it came to property values.
The latest figures from Rightmove, covering Q1 2019, also show that national rents have performed strongly over the last year. The London market in particular has performed fantastically, with growth of 8% in the last year and the average property now renting for a record £2,093 a month.
Rightmove’s commercial director and housing market analyst, Miles Shipside, says: ‘There was a temporary slowing and drop in rents in London when the second home stamp duty tax came in back in 2016 as so many investors bought properties before this came in, leading to a huge increase in rental choice. But the lack of new stock since that time has led to rents increasing again, and London renters are now faced with rents that are over 8% higher than this time last year. Outside London, the pattern is not as extreme, but there is still a significant drop in fresh choice.’
Demand in the capital is far in excess of the available supply, with the number of available properties 33% lower than it was two years ago. The situation is the same across the rest of the UK even if it is not quite as severe, with rental stock dropping only 13% across the rest of Britain.
However, this is still enough of a gap to make it ideal conditions for landlords as is demonstrated by rents rising annually in every region apart from the North East.
The North West led the way in England outside of the capital with annual growth of 3.8%, closely followed by the East Midlands (3.6%), the South West (2.8%) and Yorkshire and the Humber (2.5%). Outside of England, both Scotland (6.7%) and Wales (3.3%) recorded strong annual growth.
Between the lack of available stock and the rising rents across the vast majority of the UK, it is clear that rental demand is present and strong. Add in recent figures from Hometrack which show a rental rise across all cities for the first time in more than three years, this is clearly a good time to be a buy to let landlord.
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