Average rents in the UK increased by 1.1% in the 12 months to September 2017, driven by growth in the south of the country although they were unchanged in Greater London, the only area not to see a rise.
The biggest annual increase was in the South West of England with rents up to £795 per month, followed by a rise of 2% in Wales to £657 and a 1.9% rise in the South East of England to £1,032, according to the latest lettings index from Countrywide.
Rents increased by 1.7% in the East of England to £937 and although the highest rents are still in Greater London at £1,712, they did not move month on month. In the Midlands, the North of England and Scotland rents increased by 1.2% to £674, £637 and £655 respectively.
The report also shows that more homes coming on to the rental market in Northern England has slowed rental growth. In September there were 12% more rental properties on the market across the three regions of Northern England with one in 10 owned by a London landlord.
And more people renting a home are moving out of London. Over the last 12 months some 64,672 tenants left London, the highest number since 2007, with the majority, 78% or 50,406, moving out of the city to rent and the rest buying instead.
The index report points out that this is a significant shift from a decade ago when the majority of tenants moving out of the capital, 51%, did so to buy and since 2007 over half a million tenants have left London, with 30% of them buying a home.
Tenants leaving London to rent moved twice the distance as those leaving to buy, 101 miles compared to 53 and a combined average of 89 miles. This is reflected in the growing proportion heading to the Midlands or the North. This year 48% of tenants leaving London to rent somewhere else headed north compared to 31% in 2007.
Despite the growing number of London tenants heading north, the majority remain close to the capital. More homes in Slough, some 46%, are let to a tenant coming from the capital than anywhere else in the country while Tandridge is the top hotspot for buyers who were renting in the capital.
The average London tenant buying a home outside the capital spends £388,000 on a new home, some 16% less than someone who was selling a property in London. Tenants coming from London spend an average of 9% more than those who already live locally.
‘For people in their 30s leaving London is something of a rite of passage. But as the number of those renting has grown the move out of London is increasingly likely to be in the rental market. A decade ago most tenants moving out of the capital did so to buy. But since 2007 leaving London to carry on renting somewhere else has become more typical,’ said Johnny Morris, research director at Countrywide.
‘Rental price growth continues to be supported by the low number of landlord purchases, particularly across the south of England. The number of rental homes on the market has continued to drop with more southern based landlords looking northwards in search of better yields and lower stamp duty bills. Conversely northern England has seen double digit increases in the number of homes on the market which is likely to temper rental growth,’ he added.