The average household in the private rented sector in England and Wales now pays £860 a month for their home, but the north-south divide for rental yield is still apparent.
The latest rental index tracker from Your Move has revealed the state of the nation’s rental market, with the East Midlands achieving the highest growth in rental values over the past 12 months of 3.2%, bringing average rents there to £893 per month.
The East Midlands, which includes Derby, Leicester and Nottingham, is now the joint second most expensive place in the UK for renters with the south-east, according to the index, although the south-east only saw rents rise by 1.6% in the year to March 2018.
Highs and lows of the market
London is still, unsurprisingly, the area with the priciest rents in England and Wales, with average costs for tenants of £1,276 a month, although the market has stayed relatively flat over the past year. Across the various sections of the capital, however, the picture varies greatly, with Zone 2 rents averaging £1,583 a month compared to Zone 5 where tenants can expect to pay around £1,102.
In the south-west, rents increased by 2.3% to an average £677, while the east of England saw rental values rise by 2.1% to a pricey £893 a month. The West Midlands saw a more modest hike over the year of 2% to £618 a month, although the market there is tipped to see strong performance in the coming months and years, while rents in Yorkshire and the Humber crept up by 1.7% to £575.
The north-east recorded a year-on-year rental fall, according to Your Move, down by 1.8% to £536 a month, and Wales also lost some rental value with a small 0.8% decline to £593 a month.
Good yield performance for landlords
In terms of yields, it seems that the north is still outperforming the south of the country overall. Topping the list by a margin was the north-east, where buy-to-let landlords and investors made average yields of 5% in March, compared to the national average across England and Wales of 4.4%.
Closely following this, the north-west saw impressive rental yields of 4.9% last month, with popular cities including Manchester and Liverpool performing well, as well as the surrounding up-and-coming areas such as Preston.
The south-east and the south-west both saw average yields of 3.3%, while in London investors saw average yields of 3.2% as high property prices continue to affect bottom lines.
Martyn Alderton, national lettings director at Your Move, said: “The market in London has stopped its recent slowdown, but still lags behind the strong growth seen in the East Midlands. The south-west also grew at a strong pace while the north-east delivered the strongest yields to landlords.
“This shows that there’s something for every investor and landlord, whether yield driven or seeing capital appreciation, in today’s rental market.”
