The private rental sector had a mixed 2018 – London remains out of reach for many – but the big Northern cities still offer room for growth
The performance of the private rental sector in 2018 was certainly varied, especially when viewed from a regional perspective.
Landbay’s National Rent Review suggested Edinburgh and Nottingham saw the largest annual rental growth in the UK. Edinburgh saw rent rises of 4.63 per cent, with an average rent of £1,073, while rents within Nottingham increased by 4.62 per cent to hit an average monthly figure of £688. Aberdeenshire saw the largest decline, of 7 per cent.
Rents as a whole across the UK were reported to have risen by an average of 0.97 per cent. Six London boroughs saw declining rental figures – but overall figures across the capital saw an average rise of 0.58 per cent. Despite these figures, London is still unaffordable for many, with other UK cities becoming increasingly attractive for tenants and investors.
For the past few years I have been advising landlords to look north. Cities within the proposed Northern Powerhouse, including Liverpool, Manchester and Leeds, have seen huge investment, creating employment and amenities that have proved to be attractive.
Because these cities have not experienced the extortionate rents of London, there is room for growth.
To further underline this, Your Move’s England and Wales Rental Tracker found property investors in the North East achieved an annual rental yield of 5 per cent in the year to November 2018.
This figure fell slightly to 4.8 per cent for those in the North West. In contrast, yields stood at 3.15 per cent in London, 3.31 per cent in the South West and 3.32 per cent in the South East.
And the future continues to look bright for the Northern regions, with big developments planned.
Leeds was recently named as the new home for Channel 4 HQ and, if the BBC’s move to Salford is anything to go by, this development should reap huge economic rewards.
London is likely to come under even further pressure in 2019, but there are still plenty of opportunities for landlords out there – provided they are willing to evaluate locations, propositions and their future plans.
Ying Tan is managing director of the Buy to Let Club