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The Northern private rental sector (PRS) is growing at a faster pace than London as renters relocate from the capital amid rising living costs and significant investment in other cities.
The findings from the third edition of the National Rent Review by buy to let lender Landbay show PRS Rental growth in Leeds (2.54 per cent), Birmingham (2.05 per cent) and Manchester (1.91 per cent) are significantly outperforming the UK average.
UK PRS rents rose by 0.03 per cent in November 2018 which, although the lowest monthly rise since the start of the study, feeds into growth of 0.97 per cent in the year; 0.04 per cent higher than the same point in 2017. This is mostly down to London’s improved performance, recording growth of 0.58 per cent this year.
The average monthly UK rent currently sits at £1,212, a rise of £10 since the start of the year. When London is removed, rents sit at £769, up from £761 since the beginning of 2018.
Rents are rising in 27 of the 33 London boroughs, a very different picture from this time in 2017 when rents were falling in 26 of the capital’s boroughs. While every region in the UK has seen rents rising, the speed of growth has not been consistent – with all areas other than London experiencing a slowdown.
The East Midlands (2.25 per cent), Yorkshire & Humber (1.50 per cent) and West Midlands (1.48 per cent) have all experienced the most substantial PRS growth in the past year and are expected to climb further as we head into 2019.
Growth in the North East peaked to its highest point in two years in November 2017 but since then growth has depreciated to 0.05 per cent on an annual basis – it’s lowest growth rate since August 2013.
CEO and co-founder of Landbay, John Goodall, said: ‘It’s hard to escape the fact that we’ve seen a slowdown in the property market due to Brexit uncertainty and recent tax and regulatory changes for landlords.
‘In that context, these growth figures show just how resilient property continues to be as an asset class. As with all investments, it is prudent to have a diversified portfolio – backed up in the case of buy to let by London’s recent fall and revival alongside strong performances from cities including Leeds and Manchester.
‘London’s green shoots paint a positive picture for landlords ahead of what will likely be testing economic times with Brexit and further interest rate rises expected.’