Leicester (3.02%), Nottingham (2.96%) and Northamptonshire (2.44%) were found to be the best areas for rental growth over the past 12 months, according to the most recent index from buy to let specialist Landbay.
Eight of the top 10 hotspots for rental growth were in either the East Midlands or East of England. These two regions, as well as the South West, continue to lead the way in terms of rental growth, with annual increases of 2.06%, 1.50%, and 1.54% respectively.
The report also found the average rent for a property in England grew by 0.64% in the year to April. Calculated without London, where rents continue to fall (-0.27%), the average for the rest of England shows a more considerable annual growth of 1.19%.
John Goodall, chief executive and co-founder of Landbay, commented: “Falling rents in some parts of the country, especially expensive prime London locations, distort the picture for the rest of England where rents are continuing to grow at a steady pace.
“Britain will always need homes, and the growing cohort of people that can’t buy, or don’t want to, will more than ever rely on the private rental sector to house them in the years ahead.
“Rental growth may not be what it used to be, but the pace of change varies wildly between regions. Prospective landlords need to be astute 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.”
Six London boroughs feature in the UK’s bottom 10 places for falling rents over the past year, including Kensington and Chelsea (-1.40%), Kingston upon Thames (-0.98%), Hammersmith and Fulham (-0.81%). More than half of the capital’s 33 boroughs have seen rents fall year on year.
Bucking the trend, Bexley (1.37%), Havering (1.30%) and City of London (1.19%) have seen rents rise by more than 1%.
The average rent paid for a property in England now stands at £1,232, or £768 if London is excluded from the calculation.
The lowest average rent is found in the North East (£552), where rents have shown very modest long-term growth, increasing by just 1.8% in the past five years.
The Buy to Let Mortgage Index
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4th May 2018