Residential rents have fallen in England and Wales by 0.5% in the 12 months to June but some regions have seen strong growth in the lettings market, the latest index shows, taking the average rent to £861.
The fastest rising rents were in the South West of England, up 3.4% in the last year to an average of £686. Other regions to boast strong growth were the East Midlands with a rise of 2.8% to £656 while in the East of England the average rent is £890, up 2% year on year.
Rents in London dropped slightly in the last year to an average of £1,271 per calendar month, down 0.5% compared to a year ago, the data from the Your Move rental tracker index also shows.
London continues to be divided depending on where a property is located. When London Travelcard Zones are considered, properties located in Zone 2 are typically let for £1,560 per month, significantly higher than those in less central areas. In Zone 6, much further from the centre of the city, the average property lets for £1,189 a month.
The data also shows that Northern regions offer the highest yields for landlords, topped by 5% in the North East, followed by the North West at 4.8% and Wales at 4.6%. The lowest yields continue to be in London at 3.2%.
‘While the property market in London has cooled, the strong performance in other areas means landlords across England and Wales are enjoying good returns,’ said Martyn Alderton, national lettings director at Your Move.
The South West of England is home to the fastest rising rents as tenant demand continues. ‘Plymouth is a particular hotspot. As well as stunning countryside and lower cost of living, current multi-million pound developments are creating employment opportunities. Coupled with the expansion of the dockyard and hospital, strong economic growth is encouraging many tenants to live here,’ Alderton explains.
‘Plymouth’s student market is also very active, as is demand for city centre apartments and Houses of Multiple Occupation (HMO’s). We are seeing many millennials preferring to rent here due to their lifestyle choices and the flexibility it brings compared to buying. Demand is therefore keeping rental and yield payments up as tenants are willing to pay provided the quality of the rental property is high,’ he added.
Demand for rental properties is also high in Bristol. Alderton pointed out that there is ongoing development in the City and strong employment opportunities available as a result of Airbus, Rolls Royce, GKN and the MOD which have a huge presence already in the city.
‘As a result demand for rental properties is high which is contributing to rent increases. Areas around Filton, for example, have had a huge impact on average rental prices recently due to the super hospital being built, which covers the whole of the Bristol area, there is a high demand for rental properties in that area and all the surrounding areas,’ Alderton said.
