The average rent for a property in the UK increased by just under 1 per cent (0.96 per cent) in the year to April, as slow rents in London (0.66 per cent) continued to drag on otherwise resilient growth in the rest of the UK (1.11 per cent), according to the latest Landbay Rental Index.
The lender suggested that those landlords seeking higher rental growth should look north of London, or even England, with Scotland possessing the highest year-on-year rental growth at 1.78 per cent. In the highlands, the average rent is £750, only just shy of yhe UK’s average £773, excluding London.
Edinburgh City reported the highest rental growth of any geopraphy in the UK, with growth of 5.44 per cent year-on-year. Glasgow City also had high rental growth, 2.59 per cent, while East Lothian recorded growth of 2.21 per cent.
Looking on a country-wide scale, Wales reported the second-highest growth at 1.26 per cent, but has lower average rents at £658 per month. Merthyr Tydfil has the second highest rental growth in the UK (4.65 per cent) while Blaenau Gwent comes in third (3.92 per cent). However, the index reported that no Welsh region featured in the thirty areas of lowest annual rental growth in the UK.
In England, Nottingham boasts the highest rate of rental growth at 3.84% per cent. Rutland and Leicester (2.56 per cent and 2.33 per cent respectively) are additional reasons for landlords to consider widening their search north of London in the hunt for above average growth. The East Midlands also recorded a higher growth rate (1.98 per cent) than Scotland, as a region.
However, while average rental growth in London is minimal, the average monthly rental price was £1,906, while the average rent nationwide was £1,218, including London.
Landbay suggested that those “determined to find rental growth in London”, Islington may be the most appropriate area, with year-on-year growth of 1.64 per cent. Wandsworth saw growth of 1.43 per cent and Southwark of 1.35 per cent; this is particularly impressive compared to areas that have seen rents fall, such as Kensington and Chelsea (-0.21 per cent) and Westminster (-0.02 per cent).
Commenting, Landbay CEO and co-founder John Goodall said: “Landlords can rest assured that there is decent rental growth to be found across the UK, particularly if they look north of London. On the face of it, landlords have had a tough time in the past few years, from increased regulatory pressure to a significant increase in stamp duty costs, yet they have managed to shoulder many of these costs without passing them onto tenants.
"For brokers, this provides them with the opportunity to give expert advice to their clients about changing elements of the housing market and which areas have the most potential in the coming months.”
Subscribe to our newsletter to receive breaking news by email.