Some headlines have been saying that rental growth across England and Wales is flat and barely moving, but new figures show the extent to which this hides a vibrant and increasingly disparate rental sector.
The growth in the various regions is increasing quickly, with London the main loser whilst the East Midlands and North West are the biggest winners.
The latest Your Move Rental Tracker results have shown hugely different pictures depending on which part of the country you’re concentrating on, with London rental growth contracting slightly.
The biggest rental increases were found in the South West, far outstripping the South East. Rents in the region – which includes rural areas of Cornwall and Devon, plus the major city of Bristol – rose by 3.4% in the last year and the average rental price now stands at £686.
The East Midlands wasn’t far behind, however, with prices growing by 2.8% to hit £656 whilst the East of England saw the average price hit £890, following growth of 2% in the year to date.
The publishers of the research said ‘demand for rental properties is high which is contributing to rent increases.’ The market is changing with rents in the capital apparently hitting a plateau due to affordability issues, and it appears that the renters who may have driven those prices higher are now seeking better value to the west or to the north.
Other notable findings included the fact that landlords in the north of England are currently enjoying the highest yields in the country. For example, the North West had particularly strong yields of 4.8% in June. In Wales the typical yield was 4.6% whilst the returns in London were a comparatively poor 3.2%.
There was more positive news for landlords, with the report stating that although ‘9.1% of all tenancies were behind with their payments this month, [this] is lower than the 9.2% found in May and the 9.4% recorded in April’, showing a decrease in tenants facing financial difficulties.
In February 2010 tenants in arrears hit a high of 14.6% of all tenants, meaning that landlords can enjoy a huge drop of approximately 5%.
In Scotland two of the five regions recorded price increases of more than 10% for rental properties, marking almost historic increases.
As the summer draws to a close and the year reaches its final quarter, we’re likely to see demand to increase further in the reasons.
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