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Buy to let rent winners and losers
30 January 2015
Landlords in Leicester are enjoying the biggest buy to let rent increases as demand for homes outstrips numbers on the market.
As a result, rents are up a massive 45% in just a year – climbing from an average of £421 a month to £611 in December.
However, not all landlords can celebrate such good returns as housebuilding in the London commuter belt has increased the supply of homes and driven down rents as more landlords compete for the same tenants.
For instance, rents in Colchester, Essex, have plunged by a quarter from an average £708 a month to £539.
“The data points to some big differences in rental market performance in 2014 from city to city. The factor behind these differences is as simple as supply and demand. In Leicester and Cambridge, demand for rental property is outstripping supply and vice versa,” said HomeLet spokesman Martin Totty.
The top 10 buy to let cities for rising rents in 2014 were:
• Leicester (+45%)
• Southall, West London (+38%)
• Cambridge (+24%)
• Gloucester (+22%)
• Chelmsford (+19%)
• Swindon (+18%)
• Central London (+12%)
• Telford (+10%)
• Ilford, East London (+9%)
• Harrow, North London (+9%)
Meanwhile, landlords struggling with buy to let homes generating lower rent were in:
• Colchester, Essex (-24%)
• Croydon, South London (-23%)
• Brighton (-18%)
• Romford, Essex (-12%)
• Manchester (-7%)
• Cardiff (-5%)
• Belfast (-3%)
• Huddersfield (-2%)
• Lincoln (-2%)
• Leeds (-1%)
“Last year was predominantly a year for growth in the rental market with rents on average 6.6% higher than the previous year. With property prices continuing to grow and mortgage criteria tightening, the renting represents a much more accessible option for home hunters than buying.” said Totty
“The demand for rental property is increasing, and we expect it to continue in 2015 as large numbers of people are priced out of buying.”
Nationwide, average buy to let rents were 6.6% up from £813 to £867 a month, said the firm.