Across the UK in the 12 months to February, average rents crept up by just 0.69% according to data from the Landbay Rental Index, but one part of the country saw triple the average growth.
Landlords who owned and let out properties in the East Midlands over the past year stood to make the greatest gains across the whole of the UK as average rents grew by 2.24% across the region – which is more than three times the UK national average, research from Landbay (powered by MIAC) has revealed.
Breaking it down by area, Leicester came out on top with average rental growth of an impressive 3.42% in the 12 months to February, while Nottingham wasn’t far behind with 3.30%. With UK inflation levels currently sitting at 3%, these rises have bucked the trend for the rest of the country.
The number of bedrooms in a property makes a huge difference to the level of rental growth, with three-bedroom properties in Leicester pulling in rent rises of an average 5.01%, proving that these homes are the most in-demand in the area right now. Following this, one-bedroom homes saw a 4.03% increase, while two-bedroom properties – which traditionally pull in the best rents as they appeal to a wide range of renting types – has only seen a 1.41% rise over the same period.
After the East Midlands, the east of England was the next top performer with average rents going up by 1.58%, which is still well above the average in the country, led by Peterborough with a 2.99% hike and Cambridgeshire with 2.24%.
What this means for buy-to-let
According to the CEO and founder of Landbay, John Goodall, the east and East Midlands are already more affordable than other parts of the country, which has led to a growing level of competition as they become increasingly attractive to buy-to-let investors. This also applies to areas such as the booming north-west, where competition has been heating up in recent years.
He added: “Landlords hoping to capitalise on high demand in the East should pay close attention to the number of bedrooms in the property before making their purchase. Demand for two-bed homes appears to be severely lagging other sizes.
“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.”