Rents have risen faster in the South West of England and the East Midlands than in any other region in England or Wales in the past 12 months. According to research by Your Move Rental Tracker, average prices in those two regions rose by 3%. The average monthly rent in the South West is now £682, while in the East Midlands, it stands at £656. These are both still well below the average monthly rent across all regions, which is now £861. Whilst prices in London are continuing to fall, other regions are stepping up and are now growing at a faster rate than in the capital.
Your Move national lettings director, Martyn Alderton, said the strong rent growth and solid yields across most areas in England and Wales should be encouraging news for landlords. Despite the drop in the capital, it is still the most expensive place to rent by far, with the average London property fetching £1,273 in rent each month. In London, prices can vary a lot depending on which Travelcard Zone you invest in. Rent for a property in Zone 2 is an average of £1,492, while Zone 5, which is further from the city centre, fetches an average of £1,079. London is not the only region to see rents falling. In Wales, the average rent has dropped by 2% and is now £587, while in the North East, the average rent is now £536, which is a fall of 1.6%.
Return on investment remains steady, with the Northern regions offering the highest percentage returns. In May, the average landlord in the North East had a 5% return on investment, while those in the North West enjoyed a return of 4.8%. In London, landlords saw an average return of 3.2%, but the absolute return is often higher than in other regions because property prices are much higher. In England and Wales as a whole, landlords had an average yield of 4.17%.
More good news is that there has been a drop in the number of households in rent arrears. Your Move research shows that 9.2% of tenants were behind with their rents, compared to 9.4% in April. This is the first reduction in rental arrears this year, with the rate remaining close to the 9% mark throughout 2018. The all-time high recorded by Your Move was in February 2010, with 14.6% of households in arrears, while the most recent high was in July 2017, with 13.7% behind with their payments.
North of the border in Scotland, annual price growth soared to 7.3% this year, according to Your Move’s House Price Index for Scotland. Property prices were also up by 2.3%. Your Move’s managing director in Scotland, Christine Campbell, said the major cities and high-priced properties are creating a mini-housing boom. In general, most local authority districts witnessed property prices rising and the average property is now worth £182,936. All in all, buy-to-let investors are seeing growth in both prices and yields in many areas.
Ensure you are being transparent and fair – start using a property inspection app today to produce professional inventories, check-ins, check outs, interim inspections, building inspections, risk assessments and more with InventoryBase.
Start your free trial here today