Annual rental growth in the UK is highest in Edinburgh at 4.63%
Edinburgh has been identified as having the UK’s fastest annual rental growth with the average rent rising by 4.63% in 2018 to £1,073, new research shows.
The Scottish city narrowly beats Nottingham into second place, where rents have increased by 4.62% to £688 over the past 12 months, according to the third edition of the national rent review from buy to let lender Landbay.
In third place is Stirling with an annual rise of 3.36% to £796, followed by Leicester up 3.16% to £662, Inverclyde up 2.93% to £539, Conwy up 2.76% to £609, York up 2.73% to £785, Merthyr Tydfil up 2.69% to £507, Bristol up 2.58% to £939 and Ceredigion up 2.5% to £668.
Overall, rents across the UK rose by 0.97% which this means that rents in Edinburgh and Nottingham are growing more than four times faster than the national average and 13 different parts of the UK have seen rents rise faster than the CPI measure of inflation, which currently stands at 2.3%.
Meanwhile rents have been falling in 20 different areas with Aberdeenshire recording the biggest decline at 7.00% to £1,360, followed by Aberdeen down 6.23%, Angus down 1.75% to £444 and Moray down 1.26% to £712.
Several London boroughs, Barnet, Brent, Enfield, Harrow, Kensington and Chelsea and Hillingdon have also seen declining rents this year although, overall, London saw a rise of 0.58%.
‘There is no doubt that the private rental sector has seen a geographically varied performance throughout 2018. However, in the context of Brexit uncertainty and recent tax and regulatory changes for landlords, these figures show just how resilient the market continues to be,’ said John Goodall, Landbay chief executive officer.
‘With rental growth standing at 0.97% across the UK, cities like Edinburgh and Nottingham have put in an impressive shift, significantly outperforming London. On the face of it the scale of declining rents in Aberdeenshire and Aberdeen may appear concerning, however the reality is that these are exceptions, linked to issues surrounding Scotland’s oil industry,’ he added.
The research also highlights that rents for one bedroom properties nationally have seen the highest growth at 1.07% to £1,031, with two bedroom homes up 1.02% to £1,173, and three bedroom rentals up by 0.98% to £1,347.
Historically, growth in three bed properties has been stronger, as demand from more families entering the market has pushed up prices. However, the report says that while not directly a cause and effect, the number of new build detached properties being built has significantly increased since the start of 2008, and at the same time the number of apartments has decreased.
‘A number of factors are creating demand for smaller properties. A shortage of new smaller properties entering the wider market as well as higher tax burden on larger homes has put upwards pressure on rents for one and two bed properties as professional landlords seek sustainable yields,’ Goodall pointed out.