Rents in East Midlands growing the fastest

Michael Lloyd

April 25, 2018

Rents in the East Midlands grew by 3.2% in the year to March 2018, faster than anywhere else in England and Wales, the Your Move Rental Tracker found.

The typical property now costs £893, the joint second most expensive place in the survey, tied with the South East, which saw prices increase by 1.6% year-on-year.

However, its growth was outstripped by the South West, which recorded 2.3% growth in the last year, and the East of England – which saw prices rises 2.1%.

The West Midlands (2% growth) and the Yorkshire and Humber region (up 1.7%) were also strong performers.

Martyn Alderton, national lettings director at Your Move, said: “The market in London has stopped its recent slowdown, but still lags behind the strong growth seen in the East Midlands.

“The South West also grew at a strong pace while the North East delivered the strongest yields to landlords.

“This shows that there’s something for every investor and landlord, whether yield driven or seeing capital appreciation, in today’s rental market.”

The North East was the top region to post a price fall, with the typical rent dropping 1.8% year-on-year to £536 per calendar month – the lowest in the survey. Behind, Wales dropped by 0.8% to £593 per calendar month.

London remains the most expensive place to rent with an average price of £1,276, although this was flat compared to March 2017.

However, there are many disparities in London based on where a property is located. When looking at prices in each London Travelcard zone, there was a wide variation across areas.

In Travelcard Zone 2 the average rent was £1,583 in March while further away from the centre, in Zone 5, a typical property costs £1,102.

On a monthly basis, no region of England and Wales posted a price change of greater than 0.5%. Wales the only area with shrinking yields.

All but one region in this survey saw rental yields stay the same compared to last month. Wales was the only region to post a fall, with the average investor return ticking down from 4.8% to 4.7% in the last month.

All regions of England enjoyed the same returns on a percentage basis as they did last month. However, there are still major differences between northern and southern parts of the country.

Despite rents falling, the North East continues to offer stronger returns than anywhere else. The region – which includes popular university towns in Middlesbrough, Newcastle and Sunderland – delivered an average yield of 5% this month.

This was slightly ahead of the North West, where the average property returned 4.9% to investors. London and surrounding areas continued to offer the lowest percentage returns, with the typical property in the capital generating a return of 3.2%.

Elsewhere the South East and South West regions both recorded an average of 3.3% this month. Across England and Wales the average yield was 4.4% in March 2018, the same as a month earlier.

There was a slight increase in the proportion of renters in England and Wales in arrears during March 2018, although the rate remains broadly in line with recent months.

Some 9.1% of all tenants were behind on their payments this month, up on the 8.6% rate recorded in February. This figure is also above the 8.4% reported in January’s survey but remains well below both the recent and all-time high recorded by Your Move.

The all-time high of 14.6% was recorded in February 2010 while the most recent high of 13.7% was found in July 2017.

Prices increased by 3.2% in the last year to reach an average of £860, on a seasonally adjusted basis, in March while on a non-seasonally adjusted basis, rents increased to £828, up 3.5% year-on-year.

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