Average rents in Yorkshire & Humber and the North East fell by around 2.5% for the second month in a row, according to the latest Move with Us Rental Index.
These regions are both reportedly ‘up and coming’, with factors such as booming IT employment and infrastructure investment driving demand for rental housing.
Move with Us said that recent falls in price may be due to over-valuation by landlords, but believes it is more likely that those entering higher paid jobs are deciding to purchase instead of rent as mortgages become more affordable.
Average advertised rents in Great Britain have remained close to January price levels, with minimal growth. The average rent currently stands at around £972 per month and is likely to remain at around the same level in the coming months, as increasing employment and mortgage availability supress demand for rental properties. Most regions have seen small increases in advertised rents of between 0.04% and 1%.
In contrast, Scotland, one of Britain’s poorest performing rental markets, has seen advertised rents rise above January 2012 levels for the first time in four months. This marks a third consecutive month of increases in advertised rents. This may be due to the weak performance of the Scottish resale housing market which is pushing up demand for rental properties and therefore prices across the country.
London appears to have recovered from a three month decline with advertised rents starting to grow again. Prices bottomed out at £2,194 per month in mid-February before increasing to £2,196 by the end of the month.
This appears to have had a knock-on effect on the surrounding regions, with the South East and East Anglia continuing to increase steadily throughout February. Advertised rents in both regions have increased at an average of around £8.50 per month. This looks to be the start of a yearly cycle of rent increases and therefore landlords can expect prices to grow through the first half of the year.
Average advertised rents in the North West and West Midlands both continued to increase at the steady rate seen throughout 2012. These regions appear to be the most stable, with yearly rent increases of 7.46% and 3.55% respectively. In contrast, advertised rents in the East Midlands and Wales have continued to decline and can be
expected to do so in the coming months.
Robin King, director of Move with Us, said: “Overall, average advertised rents have not changed by a large amount this month, with seven regions changing by less than 1%. However, there are several regions that are set to see continued changes in price by the end of the quarter.
“With improving economic conditions and increases in borrowing, we may be about to see a change in the rental market and a move away from renting due to improved levels of first time buyers entering the market.”