Rents in Salford, Leeds, Birmingham and Manchester increasing by more than double the UK average
The “millennial exodus” in London is behind the surge in rental growth in regional cities like Leeds and Manchester, new research reveals.
According to the latest Rental Index by buy-to-let lender Landbay, rents increased by just 0.6% in London over the last year, compared to an average of 0.97% across the UK, as high living costs in the capital cause more people to leave the city.
By comparison, rents are up by 2.54% in Leeds, 2.05% in Birmingham, and 1.91% in Manchester, with Landbay highlighting the new headquarters for bank HSBC in Birmingham as the main drivers of rental growth in the city.
However, rental growth is highest in Salford at 2.62%, which the lender attributes to Media City, a business hub home to broadcasters such as the BBC and ITV. Since January 2012, rents in the city have grown by a cumulative 22.76%, outpacing London’s rate of 9% over the same period.
On a region basis, the East Midlands had the highest rate of growth at 2.25%, followed by both Yorkshire & the Humber and the West Midlands with 1.5%. Additionally, Landbay predicts rents in these regions will increase further in 2019.
However, rents in the North East have slowed down to its lowest rate since August 2013 at just 0.05%, after reaching a two-year peak in November 2018.
John Goodall, Landbay’s CEO, said: “There is now a twin speed rental market as London’s rent growth is dwarfed by cities such as Leeds and Manchester. This is being fuelled by the capital’s millennial exodus as countless young professionals realise there is more to life than London.
“This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.”
According to the latest Mortgage Trends Update from UK Finance, buy-to-let remortgaging increased by 5.4% in the year to November, whilst new buy-to-let mortgages declined by 9%.