The latest Your Move buy-to-let index confirms that average rents in England and Wales hit £845 during October this year, up 2.2% year-on-year, and down 4.8% compared to October 2016. The East of England seems to have the best deal at the moment with rents rising 6% since the same time last year, and the average price now stands at £887 per month in that region. However, parts of the UK like London and the South East are becoming less and less attractive to both tenants and landlords as we approach the Christmas period. This article will offer some facts and figures that should assist in setting the record straight.
Some other parts of the UK also posted encouraging price increases including:
- The North West – rents grew to £633 per month – an increase of 3.1%
- The East Midlands – rents rose to £648 per month – an increase of 3.2%
The capital London didn’t fare as well as some of those areas and had encountered year-on-year price decreases alongside the South East. Experts claim the market continues to move away from those locations as fewer UK residents can afford to rent properties in those upmarket postcodes.
The North East also saw a decline in rental prices with average homes now on the market for £535 per month in October. However, the region is still the cheapest place in the UK for rental properties. Average prices in London now stand at £1,276 per month which is more than twice the price of homes in the North East. Still, both London and the North East saw prices drop by 1% since the same time last year.
Buy-to-let investors saw their portfolios stabilise in most instances between September and October, and average yields in England and Wales remain at 4.4% according to the published Your Move findings. However, compare those figures to the ones obtained a year ago, and homes in every single UK region generate a weaker return than they did back then. During October in 2016, average yields stood at 4.8%.
So, where do buy-to-let investors get the best deal at the moment? Well, those based in the North East of England benefit from the highest returns at the moment with yields of around 5.1% on their investments. Most property tycoons will shy away from London for the foreseeable as returns stand at only 3.2% for October this year. That means it’s possible for investors to make a much better profit elsewhere.
Landlords, investors, and tenants are more than aware of the struggle with rising rents in desirable UK locations. With that in mind, the lack of rental price growth in those areas could encourage more people to turn back to the capital if the trend continues for a few more months. However, as average rents are more than three times higher in London when compared to North East and similar regions, it’s understandable that tenants choose to live outside the city and commute.
Will rental price growth start to improve in the new year? Let’s hope so!