UK rental growth gathers pace

Property rental growth accelerated sharply during 2019 with signs that landlords are beginning to return to the market, a report published today suggests.

Average annual UK rental growth nearly doubled over the last 12 months – from 1.1 per cent in November 2018 to 2.1 per cent in November 2019, according to the latest Hamptons International lettings index, formerly the Countrywide lettings index.

Southern regions of the UK recorded the strongest rental growth, with rents in the south west of England increasing 4.2 per cent year-on-year in November, followed by the south east at 4.1 per cent. In Scotland, the growth was more muted, at 1.5 per cent to an average of £673 a month.

The report noted that lower stock levels had underpinned rental growth. There were 7.8 per cent fewer homes available to rent during the first 11 months of 2019 compared with the same period last year.

During the first 11 months of the year, landlords bought 11 per cent of the homes sold in Britain, the same level as last year. But in November alone, the proportion of homes bought by investors rose to 12 per cent, driven by increases in London.

The average rent of a newly let home in November of this year rose to £989 per month, £20 more a month compared with the same time last year.

Aneisha Beveridge, head of research at Hamptons International, said: “Rental growth in Great Britain accelerated throughout 2019, moving back towards its long-term average. While rents rose in every region, the south led the way.

“Landlords purchased 11 per cent of homes sold in Great Britain so far this year, 5 per cent less than the peak in 2015.

“However, after four years of falls there are now signs that landlords are beginning to return to the market – particularly in London where house price falls and steady rental growth are gradually enticing investors back.”