FALLING rents in London are dragging down average returns from property in the rest of England, Landbay has said.
The peer-to-peer lending platform’s latest rental index, shows the average rent for a property in England grew by 0.64 per cent in the year to April, dragged down by a 0.27 per cent drop in rents across the capital.
This put average monthly rents in England at £1,232 for April.
Average rents excluding London were up 1.19 per cent to or £768 if you exclude London, according to the data.
Leicester heads up the top 10 ‘rental risers’ with 3.02 per cent growth in the past 12 months to £647 per month, while Kensington and Chelsea – which features among six London boroughs in the top 10 areas where rents had declined – saw the biggest drop at 1.4 per cent to £3,204.
London still remains the most expensive place to rent, with average prices at £1,878, while the cheapest place to rent is in the North East of England with an average of £552 a month.
“Falling rents in some parts of the country, especially expensive prime London locations, distort the picture for the rest of England where rents are continuing to grow at a steady pace,” John Goodall, chief executive of Landbay, said.
“Britain will always need homes, and the growing cohort of people that can’t buy, or don’t want to, will more than ever rely on the private rental sector to house them in the years ahead.
“Rental growth may not be what it used to be, but the pace of change varies wildly between regions. Prospective landlords need to be astute to maximise their profits, using variations in rental growth and yields over the past year to pick out some of the most promising regions for buy-to-let. Consistent rental demand will obviously drive returns in the long-term, but by selecting the right location yields will be even greater.”