Edinburgh has the fastest growing rents in the UK with the average annual rent rising by 4.63% in 2018, Landbay’s National Rent Review has found.
This was Nottingham into second place, where rents have increased by 4.62% over the past 12 months. Overall, rents across the UK rose by 0.97% – this means that rents in Edinburgh and Nottingham are growing more than four times faster than the national average.
John Goodall, chief executive and co-founder of Landbay, said: “There is no doubt that the private rental sector has seen a geographically varied performance throughout 2018.
“However, in the context of Brexit uncertainty and recent tax and regulatory changes for landlords, these figures show just how resilient the market continues to be.
“With rental growth standing at 0.97% across the UK, cities like Edinburgh and Nottingham have put in an impressive shift, significantly outperforming London.”
Some 13 different parts of the UK have seen rents rise faster than the CPI measure of inflation, which currently stands at 2.3%.
Meanwhile rents have been falling in 20 different areas with Aberdeenshire recording the biggest decline at -7.00%. In fact, the bottom five areas are all in Scotland with Aberdeen (-6.23%), Angus (-1.75%), Moray (-1.26%) and South Ayrshire (-0.68%) completing the list.
Furthermore six London boroughs (Barnet, Brent, Enfield, Harrow, Kensington & Chelsea and Hillingdon) have also seen declining rents this year – although, overall, London saw a rise of 0.58%.
Goodall added: “On the face of it the scale of declining rents in Aberdeenshire and Aberdeen may appear concerning, however the reality is that these are exceptions, linked to issues surrounding Scotland’s oil industry.”
One-bed rents (1.07%) have grown faster than two (1.02%) and three-bedroom (0.98%) properties in 2018. The average rent for a one-bed now stands at £1,031, two-bed at £1,173, and three-bed at £1,347.
Historically, growth in three-bed properties has been stronger, as demand from more families entering the market has pushed up prices.
However, while not directly a cause and effect, the number of new-build detached properties being built has significantly increased since the start of 2008, and at the same time the number of apartments has decreased.
Goodall said: “A number of factors are creating demand for smaller properties.
“A shortage of new smaller properties entering the wider market as well as higher tax burden on larger homes has put upwards pressure on rents for one and two bed properties as professional landlords seek sustainable yields.”