For landlords, working out where the major rental hotspots are can be the difference between achieving excellent yields and struggling to occupy your property with good, reliable tenants.
If you struggle to fill your property, you’ll be more liable to encounter void periods – something all landlords are desperate to avoid.
But what makes a rental hotspot and where can they be found? Handily, insurance provider HomeLet has released data showing the towns and cities in the UK where rents rose fastest in 2015.
The company’s Rental Index will make particularly good reading for landlords in Brighton, Bristol, Edinburgh and Newcastle, with these cities witnessing the highest increases in rents in 2015.
The annual review of the rental market found that rents in Brighton and Bristol rose by 18% from 2014, closely followed by the 16% growth seen in Edinburgh and Newcastle.
Greater London, meanwhile, saw an 11% rise, while Liverpool, Glasgow, Leeds and Manchester all experienced significant increases.
In fact, rents on new tenancies were up on 2014 in nearly every part of the UK. Demand for rental property is on the rise throughout the country, with high house prices, the difficulty of cobbling together a deposit and the long-winded process of acquiring a mortgage all pushing people into the private rented sector.
Places like Coventry, Sheffield, Leeds, Leicester, Nottingham and Newcastle – where rents are cheaper and cost of living is lower – are drawing people who have been priced out of living in London and the South East.
That said, the demand for rental properties in London is as high as ever and shows no signs of slowing up anytime soon. The average rent leapt from £1,435 in 2014 to £1,523 by the end of 2015.
Outside of the capital, the average rent currently stands at £739, a rise of 4.9% from the last three months of 2014. In other words, rents rose by 8% in London and by 4.9% outside of London. Pretty good going all round!
Nearly every region performed strongly last year, with HomeLet’s research finding that rents went up in 10 out of the 12 regions of the UK, led from the front by London and the South East.
Only the North-West of England (down by 5.1% compared to 2014) and Northern Ireland (down by 0.6%) saw a fall in rents on an annual basis.
2016 looks set to follow suit, with more regional towns and cities benefiting from increased demand for rental properties as the dominance of London and the South East spreads further north, west and eastwards.
There will be challenges ahead for landlords – most pertinently in April, when George Osborne’s controversial 3% extra stamp duty for buy-to-let investors and second home owners is introduced – but those who box clever and seek out the right rental properties in the right areas should be able to achieve excellent results.
As we can see from the above data, the number of rental hotspots in the UK continues to grow year by year, which will be music to the ears of landlords across the country.