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Average rental prices up 2.3%

Average rental price for a new tenancy in the UK was £953 per calendar month in January which is a year-on-year increase of 2.3%, the HomeLet Rental Index has shown.

Rents in London increased by yearly by 2.5%, with the average rent in the capital now standing at £1,627 a month.

This is 71% higher than the UK average.

These figures are higher than the rate of inflation which was recorded at 1.8% in the Consumer Prices Index in December.

Rents in the North West are growing faster than any other region in the UK, whilst London rental growth has decreased over the past three months.

Neil Cobbold, chief sales officer at PayProp, said: “The latest figures show the market resurgence seen in the sales market has extended to the rental sector.

“There was strong annual growth across most regions in January when compared with the same month last year, with impressive growth of over 5% in the North West, Wales, Scotland and the East Midlands.

“However, there were some regional dips last month when compared with December 2019.

“This could be due to the impact of the general election wearing off.

“The decisive election result may have pushed some tenants – that were delaying their move – into action.

“This could have inflated average rents in December due to higher competition for properties.

“This heightened activity may have levelled out, but the generally secure market conditions will be welcomed by letting agencies and landlords.

“There remain some bumps in the road to contend with, including changes to Capital Gains Tax, the final reduction of buy-to-let mortgage interest tax relief and the impact of CMP reform and the Tenant Fees Act throughout 2020.

“Knowing that rents are growing with increases above 5% in some areas will reassure landlords and agents that demand for rental property remains stable as they negotiate a market landscape which continues to evolve.

“Looking forward to the next few weeks and months, there is nothing to suggest rental market prices won’t remain steady with annual growth continuing to rise.”

By Jessica Nangle

Source: Mortgage Introducer

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The proportion of income spent on rent drops

The proportion of income that tenants spent on rent fell between 2016 and 2019 despite increases in rental levels, according to The Deposit Protection Service (DPS).

Its rent index showed the average proportion of wages spent on rent decreased from 32.64% in 2016 to 30.64% in 2019.

The DPS said that various factors had helped improve the affordability of renting during the period.

These included: a 2.69% increase in average salary (from £29,559 to £30,353) and a £77 decrease in average tenancy deposits (from £905 to £828) since the introduction of the deposit cap in June last year.

Matt Trevett, managing director of the DPS, said: “Although rents have risen over the past decade, other changes since 2016 have helped ensure renting has become on average more affordable.

“Predictions that rents would rise in response to the introduction of the tenant fees ban and deposit cap do not seem to have materialised, with many landlords seemingly declining to increase rents since last summer.”

Average rents reached a peak of £777 during Q3 2019 before decreasing marginally by £4 to £773 during the following quarter.

Paul Fryers, managing director at specialist buy-to-let mortgage provider Zephyr Homeloans, added: “Although the longer-term recovery in rental levels is likely owing to broader economic factors, changes to rental figures are also more likely at moments where property changes hands.

“Over the past couple of years, professional landlords have become a larger proportion of the buy-to-let market as more and more smaller or ‘accidental’ landlords sell up, partly as a result of increasing costs.”

Northern Ireland saw the biggest increase in average monthly rents (3.01%) from £532 to £548 during Q4 2019, while average monthly rent in Yorkshire and The Humber dropped the most, from £551 to £524 (4.90%).

London continues to be the most expensive rental region, with average monthly rents standing at £1,345 in Q4.

This is over two and a half times the amount (£518) paid in the UK’s cheapest region, the North East, during the same period.

Excluding London, average monthly rent during the last quarter of 2019 stood at £672.

Detached properties saw the largest increase (0.81%) in average monthly rents, from £990 to £998, in Q4.

Monthly rents for terraced houses declined the most during the quarter, falling 0.55%, from £732 to £728.

By Michael Lloyd

Source: Mortgage Introducer

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Warning sounded on rental market as numbers plummet

Landlords are warning of a crisis in the private rental market as figures show a sharp drop in new rental properties becoming available.

The latest Residential Market Survey from RICs, published yesterday (December 12), showed surveyors reported a fall in the number of rental properties entering the rental market in November.

The November rating stood at -29 per cent — more than twice the -14 per cent recorded for November 2018.

In the RICs survey a negative net balance means more respondents were seeing a fall in new rental properties than seeing an increase so the lower the number, the worse things are in respect of rental property supply.

As tenant demand continues to increase, RICs predicted this would lead to rent increases of around 2 per cent over the next year and 3 per cent over the next five years.

Concerns have been raised about a dwindling buy-to-let market over the past few years since a series of tax and legislative changes had hit landlords’ pockets.

How the rules changed:

An additional 3 per cent stamp duty surcharge, introduced in April 2016, was closely followed by the abolition of mortgage interest tax relief for landlords.

Landlords then took a further hit when a shake up of rules by the Prudential Regulation Authority meant buy-to-let borrowers were now subject to more stringent affordability testing.

The changes to mortgage relief have been phased into the system since April 2017, but by April 2020 landlords will be unable to deduct any of their mortgage expenses from taxable rental income.

Instead, they will receive a tax-credit based on 20 per cent (the current basic tax rate) of their mortgage interest payments.

Following the changes, landlords who were higher or additional-rate taxpayers would now only get refunds at the 20 per cent rate, rather than top rate of paid tax.

On top of this, landlords could also be forced into a higher tax bracket because they would need to declare the income that was used to pay the mortgage on their tax return.

Some landlords have opted for owning property through a limited company to bypass the tax hike.

Meanwhile the Bank of England’s rule changes will mean fewer are able to borrow money to purchase a buy-to-let property than before.

David Smith, policy director for the Residential Landlords Association, said: “If the decline in the supply of new homes to rent continues to fall whilst demand is still rising, this is going to lead to a crisis in some areas as tenants desperately search for somewhere to live.

“This is all the result of increased taxation and other measures over the last three years and the result has been highly predictable as we said it would be.”

Carl Shave, director at Just Mortgage Brokers, said: “Following the onslaught of new legislation in the buy-to-let sector together with the recent tax changes for income and stamp duty, this shortage of supply will come as no great surprise.

“Changes by the government to try and assist the home ownership housing market have sadly been implemented without heed to the wider housing needs of the country.”

Alan Lakey, director at Highclere Financial, said clients were often turned away from the idea of buying a buy-to-let property once the true cost was explained to them.

He said: “Once they’ve considered stamp duty, the solicitor and valuer fees, the tax on the rental income and the capital gains tax when they come to sell, they usually no longer want to go through with it.”

By Imogen Tew

Source: FT Adviser

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Southern cities dominate as buy-to-let hotspots for landlords are revealed

Northern cities may dominate the tables for house price growth but a different picture is emerging for the rental market.

New analysis claims to have uncovered the best UK cities for a landlord’s buy-to-let investment.

The research by Aldermore assesses and provides a score for the average rent per room per month, short-term yield for a new buy-to-let purchase, average property price rises over the past 10 years, proportion of vacant properties in a city and size of the private rental market across the UK.

Seven of the top 10 cities for landlords were in southern England while only three northern cities – Manchester, Liverpool and Newcastle – make the top 25.

Yorkshire has three cities in the bottom six while Nottingham was the only city from the Midlands in the top 10.

Despite having among the lowest short-term yields, Oxford comes out on top with the highest overall score in the index of 74.

Manchester and Edinburgh are just behind with 72, and London has 71.

The research shows London ranks first for total rents, while Liverpool has the best short-term rental yields.

Cambridge got the highest score for price growth while Cardiff and Oxford were the best areas for low vacant stock.

Damian Thompson, director of mortgages at Aldermore, said: “Aldermore’s Buy to Let City Tracker shows there are still great short- and long-term investment opportunities for landlords.

“The number of people renting in the UK has been rapidly growing, up 1.7m in ten years, so private landlords are an increasingly central part of the housing market as supporting a robust and strong private rented sector becomes more essential.

“The UK housing market has never been a singular thing, instead made up of multiple smaller markets with their own unique conditions and challenges.

“There have been numerous regulatory changes recently and persistent economic uncertainty but this affects every region differently. Going forward, landlords will need continual backing and advice from lenders and the wider industry so they can provide choice, diversity of tenure and quality properties for renters.”

RankingCityRegionOverall score
1OxfordSouth East74
2ManchesterNorth West72
3EdinburghScotland72
4LondonLondon71
5NorwichEastern66
6BristolSouth West64
7NottinghamEast Midlands63
8CambridgeEastern63
9BrightonSouth East60
10Milton KeynesSouth East55
11PlymouthSouth West54
12HullYorkshire49
13LeicesterEast Midlands49
14CoventryWest Midlands49
15SouthamptonSouth East48
16BirminghamWest Midlands47
17LiverpoolNorth West44
18CardiffWales39
19GlasgowScotland37
20LeedsYorkshire32
21DerbyEast Midlands31
22SheffieldYorkshire30
23BradfordYorkshire29
24NewcastleNorth East26
25WolverhamptonWest Midlands25

By MARC SHOFFMAN

Source: Property Industry Eye

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Renting More Affordable Than Buying Property

It looks like the buy to let rental market is here to stay, with renting more affordable than buying property across the UK.

Lettings platform, Bunk, looked at which was more affordable in the property market out of buying and renting, and how this differs across the UK.

They looked at the cost of a rental deposit and the cost of renting for a decade, then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58 per cent.

Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.

The current average UK house price is £226,798 and so a 10 per cent deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58 per cent would mean a total repayment of £231,798, a total of £254,478 including the deposit.

This means, that renting is certainly more affordable at £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.

This most notable saving was found in Cambridge, with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.

In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.

The lowest saving was in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city, though still certainly more affordable.

Co-founder of Bunk, Tom Woolard, commented: ‘Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.

‘However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to home ownership, even with almost record low-interest rates.’

Source: Residential Landlord

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Brexit calls for landlord flexibility

Brexit is having an impact in the rental as well as the for-sale market. Concerns are growing over changes to regulation; dips in property value; possible interest rate hikes meaning rents will have to increase, affecting affordability for tenants; and the ambiguity around having EU nationals as tenants.

But amidst this turbulence is an opportunity for landlords to bring some stability to the rental sector and move forward with the evolving tenant. While the waiting game on Brexit continues, we can look at how to be more effective and responsible as landlords overall.

PPP Capital has been developing and renting property for over 15 years, but in the past few years we have had to think more creatively in the face of Brexit uncertainty about our approach to the evolving tenant. Below is a list of suggestions we have found effective in attracting and retaining good tenants and we are confident this approach will help our portfolio weather whatever Brexit brings.

Move forward with tenants’ changing profile: For example, many tenants are now pet owners. Landlords are often reluctant to accept pets, but we give applying tenants the chance to describe their pet before we decide whether to accept. We also suggest putting a clause in the contract about having pets in the property. In our experience, if we show flexibility and care as a landlord, we receive the same respect in return.

Engage in efficient two-way conversations with tenants: One way to do this is to use property maintenance software that updates tenants in real time. Making them feel connected to their landlord eliminates rounds of calls or emails and speeds up simple maintenance requests, but also builds trust between both parties.

Enabling your company, tenants, contractors and tradespeople to access it separately and simultaneously makes things easier for all involved. A digital maintenance log also helps you to see if properties are costing more than was forecasted.

Be open to installing high quality finishes and extras: More tenants than ever envisage themselves as long-term tenants rather than homeowners. For a landlord, this means tenants will give extra care to the property, treat it more like their own home and stay for years. So it is often worth investing in some ‘extras’ such as smart home systems, underfloor heating or safety features such as alarm systems and great outdoor lighting.

Give back to the community: One way to do this is sponsor a local community initiative or help to create an outdoor communal area or park nearby. This is an idea we have started exploring but not yet implemented. We have donated to national charities but also want to identify projects in communities where we have developments.

Our priority is to identify opportunities that support a greener, brighter future for the communities we are present in.

Renters’ needs are evolving. Property selection and the decision to stay for the long-term are not only determined by the basics but by a landlords’ attitude to diverse tenants and how responsible they are as a landlord. There are ambiguous times ahead, but private and corporate landlords with mid-to long-term buy-to-let and build-to-rent properties should remain very optimistic about the future.

Let’s focus on the long-term yield while doing our best to be responsible landlords with solid portfolios occupied by respectful tenants.

By Sanjeev Patel

Source: Property Week

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Not all gloom for rental market

It has been widely reported in the media how Brexit uncertainty has slowed down both the buy-to-let and residential housing market.

However, closer examination suggests other factors may have as much or more influence on current market activity.

Undeniably there has been a slowdown in both residential and buy-to-let markets over the past 12 months.

UK Finance recently reported that while buy-to-let remortgage activity has soared, the total number of buy-to-let purchase completions in 2018 was 11.2 per cent less than in 2017.

Meanwhile, their figures for January 2019 showed a 1.5 per cent reduction in the volume of residential lending, compared to the start of 2018. Put simply, people were choosing to sit tight and rely on the private rental sector rather than buy their own homes.

Key Points

  • There has been a slowdown in the buy-to-let sector
  • There has been intervention by the government in the buy-to-let market
  • The number of buy-to-let products shows lenders are positive about the outlook

For many who are renting, the prospect of saving for a deposit remains an almighty challenge.

The Ministry of Housing, Communities and Local Government’s recently-released English Housing Survey for 2017-18, indicated that the private rental sector has remained unchanged for the past five years at 4.5m households, which equates to 19 per cent of the total.

The latest survey revealed that 58 per cent of renters expected to buy a property eventually, with 26 per cent anticipating this will happen within the next two years, while 41 per cent suggested it will take five years or more to accomplish this goal.

Those timescales suggest that Brexit is not a major consideration.

Meanwhile, landlords have been dealing with more immediate and tangible concerns.

The past three years have seen substantial government intervention in the buy-to-let market, with the introduction of stamp duty on additional properties and the reduction and gradual replacement of mortgage interest tax relief perhaps the biggest financial changes.

But factor in the new house in multiple occupation licensing laws and crackdowns on living standards, plus the imponderable consequences of the imminent tenant fees ban and it is easy to see why some landlords have decided to sell up or not invest.

In particular, it has been the smaller landlord, perhaps with less time to keep abreast of the changes or adapt their strategy, that has struggled with the changes.

Many landlords with larger portfolios may already operate with more organised strategies in place, particularly in light of the Prudential Regulation Authority changes that came into effect in October 2017.

These required a more rigorous approach to the underwriting of portfolio borrowing and resulted in such investors having to provide more detail at the application stage.

It is too simplistic to simply lay current property investment levels purely at the feet of Brexit. There are too many other elements at play.

Adopting a pragmatic approach to investment

There are still plenty of reasons why buy-to-let investments can offer opportunities to those looking for solid financial returns.

Firstly, depending largely on property location and type, many landlords continue to turn a profit, which currently outweighs those available from other types of investment.

Here are a few positive factors to consider if your clients are contemplating a buy-to-let investment:

• At the moment, there is a general sense of stagnation within the property market. This means that property prices are, in many areas, no longer accelerating at previous rates.

Consequently, there may be opportunities available on the market. If you come across a property that has historically been rented out, this might mean there is less work to do upon purchase to have it ready to let.

• Market sentiment, as highlighted by the government’s survey, suggests no reduction in demand for rental homes, as thousands put on hold their dreams of home ownership in favour of renting for the foreseeable future.

In February, London estate agent Foxtons reported that in 2018 there was an 8 per cent increase in renter registrations in London, compared to 2017.

• There are big regional disparities in buy-to-let performance – and landlords are not bound geographically by where they own property. Buy-to-let yields and capital growth prospects vary across the UK, with the North West and the Midlands figuring prominently in recent data.

Since June 2016, when the Brexit vote took place, 10 UK cities have achieved double-digit house price growth, with seven located in the north of England.

• While Brexit has arguably had a negative effect on London and the South East, so too has the price of property for would-be buyers and, likewise, rent for would-be tenants.

With government investment in infrastructure, in particular the Northern Powerhouse, businesses have relocated to other parts of the UK and workers have followed suit. That has helped to create vibrant micro-economies for buy-to-let.

• Historically, house prices have recovered from any short-term economic or political unrest and proved resilient in the face of the financial crisis of a decade ago. Investment in bricks and mortar should always be regarded as a long-term strategy, in this context, well beyond Brexit.

• The sheer volume of buy-to-let products in the market place (1,162 in late February 2019, according to Moneyfacts), reflects a positive buy-to-let outlook from lenders. But the choice also comes with all sorts of incentives and competitive mortgage rates.

The Bank of England base rate remains historically low and rates for five-year fixed rate buy-to-let mortgages, for example, are more than 2 per cent less than in 2010.

The big question is how long lenders can sustain these low mortgage rates? By delaying investment in buy-to-let, some borrowers could run the risk of missing out on the lowest deals, should rates rise in the future.

We live in extraordinary times and Brexit presents its own unique set of challenges, but should not be confused with wider property market issues.

Perhaps never before has there been as much need for a buoyant private rental sector that serves the country’s escalating needs.

With low interest rates, infrastructure investment and growing tenant demand, Brexit may not present as big a challenge as recent tax and legislative changes. But, with a sound and responsive investment plan in place, buy-to-let landlords can prosper and Brexit offers no reason why that should not continue.

By Andrew Turner, interim chief executive of Commercial Trust

Source: FT Adviser

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London landlords urged to buy as rents reach all-time high

A property expert has advised investors to start buying property to let as average rents in London reached an all time high and the number of available homes continued to fall.

Rightmove found that average asking rents in London rose to £2,091 a month in the first quarter of the year, with further growth predicted this year.

After a few years of slowing and dropping rents in the capital, asking rents in London are now up 8.2 per cent on Q1 last year.

Average rents increased as available rental stock in the capital dropped 33 per cent in just two years, the figures from the property website show.

Housing supply in the PRS outside London is down 13 per cent over the corresponding period.

Rightmove’s commercial director and housing market analyst, Miles Shipside, said: “What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing, so perhaps it’s a good time for some investors to consider buying up properties to let out as the tenant demand is definitely there.

“There was a temporary slowing and drop in rents in London when the second home stamp duty tax came in back in 2016 as so many investors bought properties before this came in, leading to a huge increase in rental choice.

“But the lack of new stock since that time has led to rents increasing again, and London renters are now faced with rents that are over 8 per cent higher than this time last year.

“Outside London, the pattern is not as extreme, but there is still a significant drop in fresh choice.”

Outside London, the North East is the only region to have seen a drop in rents over the past 12 months, down 0.3 per cent.

Away from the capital, Scotland has witnessed the biggest rise in asking rents, which are up 6.7 per cent year-on-year.

But it is the South East which has the highest average asking rents outside of London, with the average rental home being £1,054 per month.

Mr Shipside added: “Suffice to say the government’s introduction of higher stamp duty on second homes purchases back in 2016 combined with other tax increases has resulted in an ongoing trend of decreasing activity from investors in the buy-to-let market.

“Consequently, we’re seeing the initial price drops being replaced by rapid price growth in some areas.”

The ban on tenant fees comes into force in England on June 1 this year, with the Tenant Fees Act 2019 summarising the government’s mandate on banning letting fees paid by tenants in the private rental sector and capping tenancy deposits.

Based on a five-week deposit cap, Rightmove has calculated that the cheapest deposits outside of London will be in the North East, at £630 per property on average. The most expensive will be in London at £2,415 per property. In London the cheapest deposit will be in Rainham (£1,216), with the most expensive in Kensington (£4,065).

Mr Shipside said: “The upcoming tenant fee ban should spell some good news for tenants and it may lead to more people being able to move more often if they want to, thanks to the reduction in the cost of moving.

“It remains to be seen if the ban will be passed on in other ways such as increasing rents and tenants will still need to find a pretty hefty rental deposit in many areas.”

Source: Simple Landlords Insurance

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Buy-to-let products hit 12-year high! Is it time to plough into the rental market?

If you’re looking to get into the rental market, you may well find yourself spoilt for choice when shopping for a mortgage. According to price comparison expert Moneyfacts, there are some 2,162 buy-to-let products to choose from right now, the highest number since October 2007 when 3,305 mortgages were available.

Lenders are falling over themselves to grab a slice of buy-to-let despite the uncertainties created by the Brexit saga and the possible consequences of it on the British housing market. “It is encouraging that buy-to-let landlords have more mortgage choice than they have had at any time in almost 12 years,” Moneyfacts finance expert Darren Cook commented, noting that product numbers have jumped by 397 over the past year and by 706 since the same point in 2017.

Costs are rising Whilst competition might be on the up, the fight amongst the UK’s banks and building societies has not made investment in the rental market any more cost-effective for landlords. As Cook commented: “It is also evident from our research that heightened competition to try and attract buy-to-let business has not resulted in a fall in interest rates, as has recently happened in the residential mortgage sector.”

The average rate for a two-year fixed-rate mortgage has edged both higher and lower over the past two years, but the current level of 3.12% stands at a premium to the 2.92% average seen around six months ago and the 2.96% witnessed in March 2018.

Meanwhile, the average rate on a five-year fixed-rate mortgage currently sits at 3.61%, up from 3.46% in September and 3.43% a year ago.

Dive in or stay away? Rising mortgage rates are the last thing that proprietors need right now because of the stream of tax changes in recent years that have pushed up the cost of owning and letting out property, from an increase on stamp duty to 3%, to axing tax relief which allowed mortgage interest to be subtracted from rental income before tax was calculated.

Bigger payments to HMRC aren’t the only problem, though. There’s a galaxy of certificates and therefore additional charges that proprietors need covering everything from maintenance to safety, to the listing and management of their properties, extra costs that all add up.

The government now has a huge appetite for restricting the activity of landlords through extra costs and tighter renting rules. It’s been identified as a critical vote winner given the ocean of Britons struggling to get onto the housing ladder as a result of the country’s huge property shortage. So if you grab a slice of buy-to-let, you’ll to be braced for investment here to get a lot more expensive, as well as restrictive, in the years ahead as government policy evolves.

What’s more, you’ll need to be prepared for Bank of England interest rate hikes, possibly as soon as later this year, and a subsequent increase in mortgage costs. A possible house price dip as we have seen in London over the past year or so could be on the horizon as well to smack the value of your investment portfolio. All things considered, I think buy-to-let is far too complicated and costly to participate in today, and I for one would rather use my money to invest elsewhere.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Source: Investing

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Rents in the regions grow faster than UK average

Rents in the UK’s regional hubs are growing significantly faster than both London and the UK average, as workers continue to relocate from London, buy-to-let lender Landbay has found.

Rents rose by 0.03% in November 2018 which, although the lowest monthly rise since the start of the study, feeds into growth of 0.97% in the year; 0.04% higher than the same point in 2017. This is mostly down to London’s improved performance, recording growth of 0.58% this year.

John Goodall, chief executive and co-founder of Landbay said: “It’s hard to escape the fact that we’ve seen a slowdown in the property market due to Brexit uncertainty and recent tax and regulatory changes for landlords.

“In that context, these growth figures show just how resilient property continues to be as an asset class. As with all investments, it is prudent to have a diversified portfolio – backed up in the case of buy-to-let by London’s recent fall and revival alongside strong performances from cities including Leeds and Manchester.

“London’s green shoots paint a positive picture for landlords ahead of what will likely be testing economic times with Brexit and further interest rate rises expected.”

The average monthly UK rent currently sits at £1,212, a rise of £10 since the start of the year. When London is removed, rents sit at £769, up from £761 since the beginning of 2018.

Rents are rising in 27 of the 33 London boroughs, a very different picture from this time in 2017 when rents were falling in 26 of the capital’s boroughs. While every region in the UK has seen rents rising, the speed of growth has not been consistent – with all areas other than London experiencing a slowdown.

The East Midlands (2.25%), Yorkshire & Humber (1.50%) and West Midlands (1.48%) have all experienced the most substantial growth in the past year and are expected to climb further as we head into 2019.

Growth in the North East peaked to its highest point in two years in November 2017 but since then growth has depreciated to 0.05% on an annual basis – it’s lowest growth rate since August 2013.

While London’s rental growth stands at 0.58% year-on-year, it is now cities like Leeds (2.54%), Birmingham (2.05%) and Manchester (1.91%) which are experiencing accelerated annual growth.

This could be attributed to internal migration as millennials leave the capital at the highest rate in almost a decade. Since the start of 2012 London has seen a net loss of nearly half a million residents as people vote with their feet amid the growing living and housing costs.

However, some will also be moving due to work commitments.

MediaCityUK now employs more than 3,000 people at its base in Salford, after welcoming 2,300 BBC employees back in 2010. Salford has seen rents rise by 2.62% year-on-year and 22.76% cumulatively since January 2012, more than double London’s pace (9%).

HSBC has announced it will move 1,000 jobs to Birmingham, whilst Leeds has seen jobs created by companies including Burberry.

Goodall added: “The truth is there is now a twin speed rental market as London’s rent growth is dwarfed by cities such as Leeds and Manchester.

“This is being fuelled by the capital’s millennial exodus as countless young professionals realise there is more to life than London. This same message carries weight with landlords, who are increasingly seeing the value of investing in these regional hubs.

“In many ways it could be argued that the ‘Northern Powerhouse’ is beginning to take effect amid stretched affordability and a harsher tax regime.”

Source: Mortgage Introducer