For investors in the rental market in the UK, one of the country’s hottest asset classes, the delicate balance between spending big in London for large returns and spending a little less in the regions for a higher yield over a longer period has always presented a big decision. However, according to new reports, the rental gap between London and the regions is now starting to close, making for good news for those already investing in the strong regions.
The latest HomeLet rental index shows that after a period in which the rent price rises in London outstripped the rest of the UK, we are now in a period where the regions are becoming stronger all the time while London’s rental rates are generally static.
In the three months to the end of February this year, HomeLet said, the price of renting in the capital remained largely static. However, in the same period, the cost to tenants in the regions climbed to a new high of £899 per calendar month on average.
It added that in terms of new tenancies, London prices for these alone were down by 2.5 per cent year-on-year in February. At the same time, the north-west, north-east and south-west of England were leading the way in terms of new tenancy prices as demand in the regions of the UK helps to push the price of renting property ever higher.
Martin Totty, chief executive officer of Barbon Insurance Group, parent company of HomeLet, said: ‘The rent price growth seen in London during much of 2014 now appears to be slowing.
‘Last year saw the London rental market outstrip the rest of the UK in terms of rent price growth but what we are seeing so far in 2015 is the private rental market becoming much more broad based with the strongest rent price growth occurring outside of the capital.’
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