0:01 AM, 16th September 2024, About An hour ago
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The gap between rents in the North and South of England has narrowed to its closest point in more than a decade, research from Hamptons reveals.
Last month, the average rent in the South cost 37% or £357 per month more than in the North, the lowest figure since records began in 2013.
This gap has closed from 43% in August 2023 and a peak of 55% in November 2021.
In the South, rental growth has cooled from 8.7% to 5.0% over the last year.
Meanwhile, in the North, rents are still rising 9.6% year-on-year, a similar pace to last year.
The head of research at Hamptons, Aneisha Beveridge, said: “Much like house prices, the rental North-South divide has been closing for the last five years.
“The narrowing reflects the cyclical nature of the housing market with house prices in the North of England rising 31%, nearly double the Southern rate.
“These figures have been mirrored in the rental market, with rents in the North of England quickly playing catch up.”
She adds: “But it’s only been in the last year that the gap has really started to narrow beyond the point we’ve previously seen.”
Rental growth on newly let homes across Great Britain fell to 5.0% in August, marking the slowest rate since August 2021 and less than half the peak of 12% seen in August 2023.
Over the last five years, rents have risen 34% or by £349 per month.
However, after adjusting for inflation, rents have only increased 10% since 2019.
Rents in Wales (-5%) have fallen in real terms.
Hamptons found that rent growth has been cooling for the last 12 months – the 12% rise seen in August last year was the peak and was five times higher than the pre-Covid average (2015-19) of 2.5%.
Last month, the average new tenancy in the South cost £1,318 per month, 37% more than in the North where rents averaged £960 per month.
Tenants moving home in the North East faced the biggest rent hikes as they rose 12.1% year-on-year, marking the third consecutive month of double-digit increases.
Meanwhile, Londoners saw the smallest rent rises in percentage terms, with rents up 2.1% year-on-year compared to the 17.1% recorded in August 2023.
Ms Beveridge said: “While tenants in the South have seen weaker growth in percentage terms, in cash terms, they’ve faced big rises.
“Despite the pace of rental growth slowing, it’s remained resolutely in positive territory, triggered by landlord’s higher costs.
“Nearly half of the average monthly rent a landlord receives now goes towards costs.”
She also warns that landlords are now awaiting the upcoming Budget and said: “While recent Budgets have mostly left investors alone, landlords will be watching October’s announcement more closely than usual to get a steer on what they can expect from a Labour government.”
