Rents in some regions of the UK and Wales are rising at their fastest rate in a decade, according to Zoopla. Rents outside of London have increased by 3.0% over the past 12 months, but there are large variations in performance.
Zoopla says that the rental market in the UK can be divided into two groups - Inner city locations and out of city locations. Overall, rental growth over the past year looks negative, with rents falling 1.2% overall. However, once London is removed from the data, Zoopla highlights that rents increased 3.0% in the rest of the UK. The typical property outside of London now rents for £780 per month.
Interestingly, it is the historically less desirable locations which have outperformed. The North East (+5.5%), South West (+5.3%), East Midlands (+4.8%) and Wales (+3.8%) have all seen rental growth reach 10-year highs. Across the Irish Sea, rents in Northern Ireland increased by an impressive 4.4%. Rather than London, Leeds and Manchester, it is Rochdale, Barnsley and Wigan that are witnessing rental growth in excess of 8%.
In fact, many of the traditional investor hotspots have underperformed during the last 12 months. Edinburgh, Manchester and Leeds are all down 3.2%, 1.0% and 0.7%, respectively. City locations have suffered as offices have closed and people have left city centre flats in search of larger homes than can accommodate a home office.
However, the worst could soon be over for the big cities and Gráinne Gilmore, head of research at Zoopla, says that “in large city centre markets, rental demand is building as offices start to re-open, which will ease negative pressure on rents.”