Average rents in Britain have been up by 1.1% in 12 months to November 2018, the latest monthly lettings index shows
The average rent of a newly let in Britain increased by 1.1% in the 12 months to November to stand at £968 per calendar month, the latest monthly lettings index shows.
Every region recorded a rise in average rents with the East of England recording the strongest growth at 2.9% to £958, according to the data from the Hamptons International index.
This was followed by Scotland with a rise 2.5% to £663, Wales up by 1.9% to £658, the South West of England up 1.7% to £801, and the North of England up 1.5% to £639, in the Midlands by 1.3% to £685, in the South East of England they were up by 1.2% to £1,034
Meanwhile Greater London saw the slowest rental growth, with rents rising just 0.1% year on year to £1,704. But in Inner London they increased by 1.2% to £2,612 while in Outer London they fell by 0.2% to £1,532.
The index also shows that the proportion of overseas based landlords fell from 14.4% in 2010 to 5.8% in the first 11 months of 2018, more than halving in that period and the lowest level ever for the index.
The proportion of homes let by an overseas landlord in the capital has fallen 4.7% in the last two years alone. Yet London still has the highest proportion of homes let by an international based landlord than in any other region.
Elsewhere, the proportion of overseas based landlords has fallen 10% in the South East since 2010, followed by the North East down 6% and the East Midlands also down by 6%.
Outside of London it is Yorkshire and the Humber that has the highest proportion of homes let by an overseas based landlord at 6.7% and the fall since 2019 is 4%, the data also shows.
Western Europeans make up the biggest group of overseas based landlords at 34%, followed by Asian at 20% and North American at 13%. However, since 2010 the proportion of Western European based landlords has fallen by 2.1%, compensated by a 2.1% rise in Asian landlords. Middle Eastern based landlords have also risen by 1.4% since 2010 and now account for 11% of overseas based landlords.
Head of research at Hamptons International, Aneisha Beveridge said the proportion of homes let by an overseas based landlord has more than halved since 2010. Sterling’s depreciation since 2016 undoubtedly makes it cheaper for international buyers to purchase property in Britain.
Beveridge said that however, the conversion of pounds back into local currency means additional costs which cut into an overseas landlords’ monthly income. This combined with a harsher tax regime for overseas investors is dissuading some international investors from entering the rental market.
She said that throughout this year rental growth has been sluggish averaging 1.5% and only passing 2% on two occasions. Affordability is not just an issue for those looking to buy a home, but impacts tenants paying rent too. And these affordability barriers will continue to keep a cap on rental growth in the future.