North-south rent divide reduces
The divide between rents in the north and the south has closed by 4.6 per cent as rental growth slowed across the country, new research has found.
Data from the Countrywide’s most recent Monthly Lettings Index shows that price growth in northern cities has remained at a ‘similar rate’.
And five of the cities with the fastest growth in new rent prices were in northern England or Scotland, with Manchester recording a 7.1 per cent increase in new lets over the past year.
Rents in Manchester rose three times faster than the UK average, while York, Leeds, Liverpool and Glasgow all reported improved rental growth over the past three months.
The number of landlords cutting the asking rent has doubled across the south, with Cambridge and London recording the greatest number of cuts in September, at 18 per cent and 17 per cent respectively.
Increased competition between landlords has seen rental growth fall from 2.8 per cent in September last year, to 2.2 per cent in September 2016.
In the last 12 months, the majority of southern cities have recorded a slow-down in rental growth thanks to greater price sensitivity.
In London, rents rose fastest in the capital’s outer zones, while remaining largely unchanged in central and inner districts. But the rate of growth was the slowest it has been since the economic downturn in 2008.
While rents across the country rose slower than last year, northern England and Wales were the exceptions to the rule.
Despite the north-south divide closing by 4.6 per cent – or £31 per month – the gap is still 26 per cent wider than it was in 2010.
A ‘different type of two-speed rental market’ is emerging, says Countryside’s research director Johnny Morris, with falling stock and growing demand driving rental growth in northern cities.
However, he warned the north-south divide in rents would take at least five years to return to 2010 levels at current rates.
Brexit-induced uncertainty had boosted the rental market as potential buyers and sellers waited, he said, but this trend had not inflated rents.
He said if these trends continued, next year could be the first time since the 1930s that more homes are let than sold.