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Rents Grow Fastest in the Midlands & North to Reach Five-Year Peak

England’s regions are home to the fastest rate of rental inflation in the UK, according to a new report.

The Northern Powerhouse

England’s regions are home to the fastest rate of rental inflation in the UK, according to a new report.

Property investment platform, Landbay, revealed that the East Midlands, North West of England and Yorkshire & Humberside have seen the quickest rate of rental growth for five years in the year to date. From January to November, each region experienced increases of 2.6%, 2.03% and 1.67% respectively.


Elsewhere in the UK, the West Midlands and the North East also experienced faster rental growth year-on-year, with a rise of 2.32% and slight decline of 0.03% for November 2016, surpassing the rate of rental inflation seen at the same point in 2015.


Across the UK, the average rental growth for the year to date stands at 1.12%, down from the 2.34% average seen in 2015.


The slowing of the average rental increase has been mainly driven by the decreasing rents in London, with the capital seeing a 0.31% decrease between January and November 2016 – a significant fall from the 2.46% increase seen in during the same period last year.


An increase in stock within the Private Rental Sector this year, following the surge of buy-to-let purchases prior to the introduction of the new Stamp Duty surcharge in April, has also been a contributory factor in the slowing of growth, according to Landbay.


The firm stated that this expansion is set to be short-lived however, as further buy-to-let taxation changes in 2017 are expected to see supply tighten and rents increase once more.


With fewer available options, tenants will have less opportunity to debate market prices, which Landbay projects will lead to rents rising above the inflation rate of 2.7%, reaching a total of 3% over the course of 2017.


Chief executive of Landbay, John Goodall, said: ‘When you look at the raft of regulatory, political and economic challenges coming to bear on the buy-to-let sector in 2016, it’s clear to see why rental growth has slowed this year, but the fall in rents is unlikely to last. We expect the tide will turn in 2017.’

 

Last week, Landlord insurance company Homelet reported that Greater London experienced the slowest annual rental growth in November, with an increase of just 1.6%.

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