The ripple effect – where people move out from London and the South East to more affordable locations elsewhere – would appear to not merely be a phenomenon in the buyers and sellers’ market.
Tenants, too, are increasingly looking to live in commuter towns where rents are cheaper and the cost of living is lower.
Flatsharing website SpareRoom.co.uk recently released its new quarterly index for Q4 2014. And it threw up some interesting results.
The data found that rents in the commuter towns of Swindon and Luton are increasing four times faster than in the capital, with those priced out of London heading for the commuter belt instead.
Looking at the UK’s 50 largest towns and cities, the research revealed that rents rose quickest in Swindon (13%), Luton (12%), Bristol (11%) and Reading (10%).
While rents in London are witnessing a slowdown – from 9.5% between 2013 and 2014 to just 3.5% between 2014 and 2015 – it’s still the place with the highest rents and the highest level of demand.
Investors and landlords are still drawn to the capital because they know their properties will be easily filled and their returns will be good.
As for value for money, the cheapest average rents are to be found in Belfast (£277), Bradford (£294), Dundee (£317) and Sunderland (£318), while Reading (£548) and Oxford (£537) were the priciest major towns/cities outside of London for tenants.
Esher, Twickenham and Kingston – which nowadays come under the banner of Greater London – are popular commuter hubs and, as a result, have the most expensive rents of the capital’s wide-ranging suburbs.
We all know that demand for private rented accommodation remains very high, with high house prices pushing more and more people into the Private Rented Sector each year. And this is shown best in Harlow, Essex, where nine would-be renters are battling it out for each available room. This number is only matched elsewhere in the UK in Belfast.
Supply is less of an issue in three of England’s most famous cities – Liverpool, Manchester and Birmingham – with these industrial giants of the not too distant past having the most available stock of any of the UK’s 50 biggest cities. So, for those looking to rent a room at short notice, these are the cities to head to.
Average rents for most cities/towns continue to rise year by year. While London is dominant, the upward movement in rents is spreading to most of the UK, which can only be good news for would-be landlords or existing landlords looking to expand their portfolio.
If you provide good-quality accommodation and market it well, you should have no issue in letting your property out.
You should also be able to charge a decent rent and secure some strong rental yields into the bargain.
The situation doesn’t look like changing anytime soon, either – instead of demand for rental homes shrinking or staying as it currently is it, it is expected to rise further over the coming years.
By 2025 PwC expects nearly a quarter of all UK households to be renting privately, with more than half of these being aged 20-39 years old.
This translates to an additional 1.8 million private renters over the next decade.
In other words, it's a good time to be a landlord.