Average cost of a new let in Britain increased by almost 2% in year to March 2019
The average cost of a new let in Britain increase by 1.9% to £969 per month in the year to March 2019, according to the latest rental index to be published.
The biggest rise was 4.1% in Outer London to £1,563 while Inner London saw a rise of 2.4% ton £2,655 and in Greater London rents increased by 3.7% to £1,737, according to the data from Hamptons International.
But rents fell in Scotland, down by 0.1% to £632 and increased by just 0.2% in the South East to £1,028 while in the North of England they increased by just 0.7% to £630 and in Wales they increased by 0.8% to £655.
In the East of England there was also an annual rise of 0.8% to £944 while rents rose by 1.8% year on year in the Midlands to an average of £680 while in the South West rents increased by 2% to £795.
Aneisha Beveridge, head of research at Hamptons International, pointed out that following a sluggish 2018, rents in London have now reached a record high, 2.3 times more than the average rent outside of the capital.
The research also looked at where London landlords are now investing and found that 59% are doing so outside of the capital. Some 34% of London based investors bought buy to lets in the Midlands and North during the last 12 months, up from just 14% in 2015 and 4% in 2010.
The East Midlands and Yorkshire and the Humber saw the greatest increase following the stamp duty surcharge introduction, with 6% more London landlords buying investment properties in those regions than in 2015.
Historically, London landlords bought their investment properties near where they lived. In 2010 just 25% of London based landlords purchased their buy to let outside the capital, with 75% investing in London.
It suggests that this may be due to the extra 3% stamp duty on additional homes that was introduced three years ago. ‘Following the tax hike, landlords have been adapting their strategy to find new ways to make their returns. Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously,’ said Beveridge.
She also pointed out that a landlord buying in London during the last 12 months faced a £24,600 stamp duty bill on average, compared to £5,330 for an investor buying outside the capital.
But the South East remains the most popular destination for London based landlords purchasing buy to lets outside the capital with 11% doing so over the last 12 months, 2% fewer than in 2015.
Dartford is the most popular destination for London based landlords in the South East with landlords living in London bought 60% of buy to lets in Dartford during the last 12 months.