No let up for Northern renters – prices up
The gap between North and South is closing – but only in terms of rent, as prices rise in the North.
Yorkshire and Humber had the highest rental price increase last year, jumping 12 per cent, according to the Move With Usrental index.
In the meantime London, which boasts the highest rents in the country, only saw a 2.5 per cent increase.
A renter in the North East is now on average £73 worse off per year, as landlords take advantage of high rental yields.
Robin King, director at Move with Us, pointed to high demand for quality rental properties and more and more tenants continuing to rent as the principal drivers behind the rise in prices.
“Gross rental yields remained at five per cent throughout Britain in 2012 with the majority of regions returning an average yield of around four per cent.
“Returns remained stable as both house prices and rents have increased at similar rates. Overall, this suggests that buy-to-let properties were a worthwhile investment in 2012,” he said.
London still leads the way in terms of yield, with returns averaging 6.1 per cent.
However, King added: “The lower entry costs in the North East and strong yield make it an interesting alternative region for investment.”
There appears to have been a kind of “stepping up” process, as the North East etc race to catch up with the rents in the rest of the country.
Growth in Wales, the North West and South West was more controlled at around five per cent, while the South East and West Midlands came in at 3.3 per cent and 2.3 per cent respectively.
Scotland was the only place where average rents fell, dropping 0.9 per cent, but East Anglia was close having only recorded 0.3 per cent growth.
“Most regions look set to return to the long term growth trend rate of 4.5 per cent to 5.5 per cent in terms of rental price inflation,” King continued.
“This is, of course, dependant on Greater London, as it has a significant impact on the overall rate across Britain both directly and indirectly. Overall we expect to see advertised rent levels in many of the high performing regions begin to settle down.”
The statistics take into account average advertised rents, rather than achieved rents.
Article courtesy of About Property