The cost of a new let in the private rented sector in Britain increased by 1.3% in the 12 months to May to rose to an average of £953 per month, the latest monthly lettings index shows.
However, the pace of rental growth slowed from 1.9% in April and average rents in the North fell for the second consecutive month, according to the index from Hamptons International.
The data also shows that rental growth in London slowed to 0.9%, driven by year on year falls in average rents in inner London.
This month’s letting index report also looked at the number of properties rented as a second home in Britain and shows that they have increased significantly in the last decade.
There were 13,680 in 2017, up 136% from the 5,800 in 2007 with the South West of England having the highest number.
Indeed, six of the top 10 second home rental hotspots are in the South of England and owners command higher rents at an average of £1,060 a month, some 24% more than the average for non second homes.
In London this rises to £2,030 a month with many second home renters using their London rental property as a pied-à-terre. Overall, London has the third highest proportion of rented homes let as second homes, behind the South West in first place and Scotland in second.
Average rents rose in seven out of eight regions in May on the back of fewer homes being available to rent than last year. Rents in the North fell for the second consecutive month, meanwhile rental growth remained strong in Wales, the East and the Midlands.
Six out of the top 10 second home rental hotspots are located in the South East or South West. Windsor and Maidenhead top the list, with 14% of rental homes let as second homes. The more rural areas of Gloucester and Tewkesbury in the South West follow with 11% and 6% of rental homes let as second homes.
‘The number of people renting second homes has reached a record high. The additional stamp duty surcharge on second home purchases introduced in April 2016, increased buyers’ upfront costs and resulted in more people deciding to rent a second home rather than buy,’ said Aneisha Beveridge, analyst at Hamptons International.
‘The places second home renters are choosing include a mix of town and country. Second home rental hotspots reflect today’s lifestyle choices from the pied-à-terres in towns and cities, close to work, schools and all the amenities that city life has to offer, to rural and coastal locations perfect for escaping the trappings of a busy urban life,’ she explained.
