Homelet index reveals widespread UK rental variations

Average rents increased in seven of 12 regions in February but growth was exceptionally varied with some areas performing much more strongly than others

The latest monthly Homelet rental index revealed that average rents totalled £899 in February, a £10 rise on January figures and up from £873 in December 2014.

Seven regions noted increases in rent between December and February 2015, with the largest in the north-east and south west – up by 3.1 per cent and 2.5 per cent respectively.

Renters in East Anglia, Northern Ireland and Yorkshire and the Humber also noted an increase in costs, but not to the same level.

Properties let in Greater London and the West Midlands remained stable compared to previous months while Scotland, Wales and the East Midlands saw rental costs fall.

“What we are seeing so far in 2015 is the private rental market becoming much more broad-based, with the strongest rent price growth occurring outside of the capital,” explained Martin Totty, chief executive of Homelet’s parent company, the Barbon Insurance Group.

“Other regions of the UK, such as the south-west of England and East Anglia, are maintaining the rises achieved in 2014 and are continuing to grow.”

Growth in London is slowing, although the high rates of rental increase seen throughout 2014 still mean the capital is one of the most expensive locations in the UK to rent.

Greater London provides a wealth of opportunities for buy to let landlords and investors however, with many reaping strong returns from commuter areas beyond the prime central locations.

The Homelet Index also focused on the prices of new tenancies that were agreed in February and found that some regions recorded significantly higher growth than others.

Northern Ireland, for example, saw prices up 7.2 per cent while the north-east of England noted a 6.2 per cent increase.

Prices charged to brand new tenants were up 4.5 per cent in the south-west and 3.7 per cent in East Anglia while new renters in London were typically paying 2.5 per cent less than in January.

Those opting to rent in Scotland, Wales and the East Midlands also saw new tenancy rental amounts decrease between January and February.

The situation in the south provides plenty of opportunities for buy to let investment as good returns can be expected, a factor boosted further by the fact void periods are currently at their lowest for 13 years.

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