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Investment property rental growth in the UK is slowing according to the latest Landbay Rental Index.
Annual rental growth in the UK without London is at its lowest point in nearly six years at 1.16 per cent, the lowest since the 1.13 per cent seen in February 2013.
Rental growth in London has seen relative stagnation over the last couple of years since the Brexit vote, but across the other English regions total rental growth has been seven times that of London (3.69 per cent to London’s 0.52 per cent).
However, the latest indications show that the rest of the UK is also seeing a slowdown in rental growth. Wales is currently at the lowest it’s been since April 2014 (1.39 per cent) and in Northern Ireland growth of 0.54 per cent is the slowest since the Rental Index began collecting data in January 2012.
Scotland, however, has seen annual rents grow at 1.66 per cent, having steadily grown over the last six months. The average rent in Scotland is now £746, higher than Northern Ireland (£573), Wales (£656), and creeping up to the English average excluding London (£776).
This Scottish growth is led by high annual growth in Edinburgh City (5.88 per cent), Inverclyde (3.56 per cent), and Glasgow City (2.49 per cent). Only Aberdeen City (-6.62 per cent) and Aberdeenshire (-5.42 per cent) are dampening the Scottish rental growth rate.
CEO and founder of Landbay, John Goodall, said: ‘Falling rents in London have masked relatively strong growth in the rest of the UK since the Brexit vote, but we are now firmly in the midst of a nationwide rental growth slowdown. This may be some relief to renters, but the cost of renting a property remains high. House prices continue to outpace wage growth, dampening the ability of aspiring homeowners to save for a property of their own, meaning demand for rented accommodation remains robust.’
He continued: ‘Rental growth may be slowing, but the pace of change varies wildly between regions. Landlords and brokers alike need to be tuned into these variations in order to maximise their profits, using variations in rental growth and yields over the past year to pick out some of the most promising regions for buy to let. Consistent rental demand will obviously drive returns in the long-term, but by selecting the right location yields will be even greater.’