Thu 02 Nov 2017 View all news articles
Landlords are likely to look north in the coming year, as North West England is now home to the fastest rising rents in the UK.
On a yearly basis, rents increased in the North West by 3.6 per cent to reach an average of £633 in September 2017, according to new figures from Your Move. Close behind was the East Midlands where prices have grown to £646 per calendar month in September, a rise of 3.4 per cent compared to last year. The East of England rounded off the top three regions with prices having increased by 2.9 per cent in the 12 months to September to £880 per month.
By contrast, prices in the South West have fallen by 2.2 per cent and in the North East they have dropped by 0.3 per cent. These were the only two regions to post a year-on-year fall. As of September, the average price in the South West was £669 while in the North East it was £536, the cheapest region in the UK.
London rents remain the highest in the country, with an average of £1,280 recorded during September. However, this headline figure continues to mask vast differences across the capital: the most affordable rents are on the boundary of Zone 4 and 5, where the price per calendar month is £1,084.
On a seasonally adjusted basis, the average rent was £843 in September, higher than the £841 recorded last month and 3.2 per cent up on the same point in 2016.
Martyn Alderton, National Lettings Director for letting agents Your Move and Reeds Rain, comments: “Once again the strongest rent growth was found in the areas away from London and the South East. As activity in the capital slows, prices and activity have risen in the north.”
Indeed, yield levels have started to stabilise across surveyed areas after being squeezed at the start of the year. Across all surveyed areas, the average yield in England and Wales remained at 4.4 per cent for a sixth successive month. But despite this stability, yields are still lower than a year ago. In September 2016, the average return was 4.8 per cent. The South East was the only region to see returns fall month-on-month, with the average landlord here getting a return of 3.3 per cent in September versus 3.4 per cent a month ago. All other regions offered the same yields as in August but are down compared to last year.
Properties in northern areas continue to offer better returns than other areas. This month the average property in the North East had a yield of 5.1 per cent, higher than any other area in the country. The North West was the only other region to post a similar return, it had a yield rate of 5 per cent this month.
With the costs landlords face now rising in the UK, following a range of government measures, it is increasingly vital for buy-to-let investors to focus on markets where yields are highest to maximise their ROI.
Read Daryl Tomlinson's advice on Wirral buy-to-let hotspots here.
Have a property to let? You can arrange a free valuation here.