Landbay’s latest Rental Index has reported that residential rents in the East Midlands grew by 2.24% in the 12 months to February, the fastest rise of any UK region and more than three times the UK average of 0.69%.
The East Midlands has seen the fastest pace of rental growth out of all UK regions for the past 11 months. At a county level, Leicester (3.42%) and Nottingham (3.30%) have experienced the most substantial rental growth in the region, both outstripping UK inflation which currently stands at 3%.
Landbay said there is a lot of variation in rental growth within property sizes in the East Midlands. For example, in Leicester (pictured) rental growth is driven by one-bed and three-bed properties, with rents for these properties increasing by 4.03% and 5.01% respectively. In contrast, a two-bed property grew by just 1.41% year on year, suggesting a glut of two-beds in Leicester.
The region with the second fastest pace of rental growth is the East of England, where rents grew by more than twice the UK average (1.58%). Within the region, Peterborough (2.99%) and Cambridgeshire (2.24%) both saw considerable growth, while in Luton rents fell by -0.13%, having been among the fastest growing counties at this point last year (4.83%).
Even with the rapid growth, renting remains more affordable in both the East Midlands (£626) and East of England (£910) than the average across the UK. The average UK rent now stands at £1,199 per month, a 0.69% increase on this time last year. London rents remain, on average, 2.5 times greater than those across the rest of the UK (£1,878 vs £761), while rents in the South East (£1,053) also well surpass the average.
John Goodall, CEO and founder of Landbay, said: “Much like Britain’s weather, rental growth was heavily impacted by the East in February. With its more affordable rents, the East is seemingly becoming an increasingly attractive buy-to-let region and as a result greater competition is driving up rents.
“As London rents remain unsustainably high this comes as little surprise, suggesting that many are moving further afield to reduce their rent burden while they save for a house of their own.
“At a national level, an uplift in rents has been on the cards for a while and is likely to continue into 2018. The Prime Minister has this week vowed to get tough with property developers who sit on planning permissions, but if we truly want to control rental and house price growth we need to build more homes, not just plan them.
“Areas in the East Midlands and East of England, such as Leicester and Nottingham, where rental growth is reaching particularly unsustainable levels, should be the prioritised focus for the government, developers and landlords.”