Renting 'shows new north-south divide'
The UK rental market is now showing distinct signs of a north-south divide, according to the latest research from Hamptons International.
According to the Hamptons International Monthly Lettings Index, the last 12 months have seen rents increase by 1.9 per cent on average across the UK. However, not only are there significant regional variations, but a clear north-south divide.
The survey showed that the highest increase came in the east of England at 3.6 per cent, with Wales up 3.4 per cent and London up 2.7 per cent, the latter representing a recovery after last year saw a two per cent fall.
While the south-east, south-west and the Midlands all saw rising rents, the north of England - made up of the north-west, north-east and Yorkshire - saw its first fall in four years, down 0.3 per cent. Further north still, Scotland witnessed a 5.3 per cent drop.
This contrast appears to have much to do with very different investment trends since the 2016 Budget. From April that year the second home stamp duty surcharge has had a major impact on landlord investment, noted Hamptons research analyst Aneisha Beveridge. Since then, she said, the overall balance of buying and selling has been negative, with landlords divesting 88,000 more properties than they have bought.
However, what the survey also showed was that the regions have been heading in different directions over the past two years. Since April 2016 the supply of homes has fallen by 16 per cent in the south, pushing up rents due to the increased scarcity of properties.
By contrast, in the northern regions the supply has gone up by 19 per cent over the same period.
Explaining the likely reasons for this, Ms Beveridge said: "Landlords are finding new ways to maximise their returns by purchasing properties elsewhere, particularly further north in search of lower stamp duty bills and higher yields."
Evidently, many landlords are accepting the trade-off of lower rents with the benefits that come from investing in the north.