Rents fall in the North for the first time in nearly 4 years
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Rents fall in the North for the first time in nearly 4 years

Rents fall in the North for the first time in nearly 4 years

Meanwhile rental growth accelerates in the South

• Average rents in the North fell -0.3% in April compared with the same period last year - the first year-on-year fall since June 2014

• Meanwhile rental growth accelerated in the South to 2.2% in April 2018, buoyed on by increases in London (2.2%) and the East (3.6%)

• Average rents in the South rose to £1,372 pcm in April, 2.2 times more than the average rent in the North (£622 pcm)

• The average cost of a new let reached £953 pcm in Great Britain in April, 1.9% up on the same period last year

 

The Hamptons International Monthly Lettings Index (formerly the Countrywide Lettings Index*) shows that in April the average cost of a new let in the North fell for the first time in four years. Rents in the North fell -0.3% in April 2018 compared to the same period last year, meanwhile rental growth accelerated in the South to 2.2%. (table 1). Across Great Britain average rents rose 1.9% year-on-year in April to reach £953 pcm.

The average cost of a new let in the South rose to £1,372 pcm in April, 2.2 times more than the average rent in the North (£622 pcm). (table 1).

Since April 2016 when the stamp duty surcharge for second homeowners was introduced, the number of homes available to rent has fallen in the South, but stock levels have been more resilient in the North. Last month there were 19% more available homes to rent in the North than in April 2016, compared with -16% fewer homes available to rent in the South. (table 1).

Since April 2016 landlords have sold 82,000 more homes than they bought in the South, compared to 24,000 net sales in the North. As a result, in April 2018 there were 5% fewer homes available to rent across Great Britain than in April 2016.

Rents in the North East have been falling for the last five months, meanwhile stronger rental growth in the South was spurred on by the East (the top performing region last month) and London where rents rose 3.6% and 2.2% respectively. In the capital, rental growth slowed in inner London to 1.9% whereas rents increased 2.3% in outer London. (table 2).

Rents rose in six out of eight regions, with Scotland (-5.3%) recording the third consecutive month of falls. The North (-0.3%) was the only other region to record falling rents. Meanwhile Wales saw the second fastest rental growth across Great Britain with the average cost of a new let rising 3.4% year-onyear in April. Average rents in the Midlands grew 2.4% over the month. (table 2).

Commenting Aneisha Beveridge, Research Analyst at Hamptons International, said:

“Low stock levels in the South continue to drive rental growth as tenants compete for fewer available homes. Since April 2016, the month the stamp duty surcharge was introduced for second homeowners, landlords across Great Britain have sold 88,000 more homes than they bought. But landlords are finding new ways to maximise their returns by purchasing properties elsewhere, particularly further North in search of lower stamp duty bills and higher yields.

Across Great Britain rental growth picked up last month to 1.9%, with the East being the top performing region (3.6%). London has seen a reversal of fortunes with rental growth averaging 2.7% so far this year compared to -2.0% in the same period last year. This growth has been driven by inner London with average rents rising 4.1% so far this year.”

Table 1 – North/South rents and stock levels Average Rent (pcm) Rental Growth YoY Change in the number of homes available to rent levels (Apr 18 v. Apr 16) North £622 -0.3% 19% South £1,372 2.2% -16% Great Britain £953 1.9% -5% Source: Hamptons International /… -3- Table 2 – New Lets (pcm) Apr-18 Apr-17 YoY Greater London £1,673 £1,637 2.2% Inner London £2,597 £2,549 1.9% Outer London £1,497 £1,464 2.3% South East £1,034 £1,014 1.9% South West £786 £777 1.2% East £946 £913 3.6% Midlands £671 £656 2.4% North £622 £623 -0.3% Scotland £584 £617 -5.3% Wales £656 £634 3.4% Great Britain £953 £ 935 1.9%

Source: Hamptons International Regional definitions North = North East, North West & Yorkshire & the Humber South = London, South East, South West & East The Hamptons International Monthly Lettings Index for May 2018 will be released on Friday 8 June 2018, embargoed for 00.01 hours Monday 11 June 2018 Ends For further information please contact: Alison Blease Head of Research PR, Hamptons International Tel: +44 (0) 776 96 77 825 Email: bleasea@hamptons-int.com /…

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