Rents increase outside of London
Young people are leaving London in their droves due to increases in living and house costs. On the other side of the country Manchester, Birmingham and Leeds are experiencing rent increases at above national average.
According to the recent Landbay National Rent Review the average rent increase in the UK was 0.97% in 2017. However landlords in Manchester saw rents increase by 1.91%, Birmingham by 2.05% and Leeds by 2.53%.
Comparatively although the capital was up on the 2017 figures it was still below the national average, at 0.58%. Rents did in fact rise in 27 of London’s boroughs. The national average monthly rent in the UK at the moment stands at £1,212, however this figure drops by almost a half when London is removed, with rents standing at £769.
With the report also highlighting the exodus of young people from the capital the knock on effect on rental growth in both London and destination cities is clear to identify. 25 – 30 year olds are now leaving in the greatest numbers for a decade, and almost half a million of London’s population has left to more affordable major cities since 2012. In contrast rents in Birmingham and Manchester have tripled in the same period.
The truth is there is now a twin speed rental market as London’s rent growth is dwarfed by cities such as Leeds and Manchester,” says Landbay CEO John Goodall.
“This is being fuelled by the capital’s millennial exodus as countless young professionals realise there is more to life than London. This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.
“In many ways it could be argued that the ‘Northern Powerhouse’ is beginning to take effect amid stretched affordability and a harsher tax regime.”
Almost two thirds more Londoners are buying property out of the capital as compared to 10 years ago according to Hamptons International. This backs up reports on how regions outside of London are performing.
“It’s hard to escape the fact that we’ve seen a slowdown in the property market due to Brexit uncertainty and recent tax and regulatory changes for landlords,” adds Mr Goodall.
“In that context, these growth figures show just how resilient property continues to be as an asset class. It is prudent to have a diversified portfolio – backed up in the case of buy-to-let by London’s recent fall and revival alongside strong performances from cities including Leeds and Manchester.
“London’s green shoots paint a positive picture for landlords ahead of what will likely be testing economic times with Brexit and further interest rate rises expected.”