Countrywide plc Monthly Lettings Index – November 2016

Press Office

Monday, December 12, 2016

Gap between London rents and the rest of country narrows

 

In November the average London rent was 0.7% lower than last year (see table 2), the sharpest fall since October 2010 when the average rent stood at £901 a month.  Over the course of the last 12 months, London has gone from the region with the second fastest rate of rental growth in Great Britain to the slowest.

The gap between rents in London and the rest of Great Britain has steadily grown over the last five years.  By 2015, the gap had reached a record £490 a month, up from £150 a month in 2010. (see table 1)  But with rents in the capital now growing at a slower rate than in the rest of Great Britain, the gap between London and the rest of the country has narrowed.  By November 2016 the gap had fallen to £489 a month, the first fall since 2010. (see table 1).  Rents in the capital currently stand 60% higher than in the rest of Great Britain.

The narrowing gap between London rents and those in the rest of the country has been driven by a surge in the number of homes available to rent in the capital.  In November there were 32% more homes to rent in London than 12 months ago while the number of would-be tenants rose by just 9%.  Over November the asking rent was cut on 11% of homes let in London, more than double the proportion in 2015 (5%).

Across the country the cost of a new let rose by 2.0% over the last 12 months, or 3.1% if London is excluded. (see table 2).  Rental growth has been driven by Northern England; the North East, North West and Yorkshire & Humber.  Taking these three regions together, rents have risen faster than in any other part of Great Britain.  A quarter (25%) of tenants renewing their contract in Northern England saw their rent increase in November 2016, up from 16% in the same month last year. 

Commenting Johnny Morris, Research Director at Countrywide, said:

“Higher than usual numbers of homes available to rent has boosted tenants’ negotiating power.  Stock growth has outstripped that of tenants.  This is in part due to the hangover from the rush to beat the 3% stamp duty charge earlier in the year and a shift in stock from the sales market.  With more choice and facing stretched affordability, many tenants are using their new found negotiating power to agree lower rents than in 2015.                                                                                          

“Since the gap between London rents and those in the rest of the country hit a high watermark in 2015, the gap has been gradually narrowing.  The pressure on affordability and number of homes coming onto the rental market in the capital means that rents are likely to lag behind the rest of the country in 2017.” 

 

The Countrywide Lettings Index for January will be released on Friday 13 January 2017, embargoed until Monday 16 January 2017.

Table 1 – Gap between London rents and the rest of GB

 

Greater London

GB (ex London)

Difference (£)

Difference (%)

2007

£966

£749

£217

29%

2008

£809

£642

£167

26%

2009

£808

£635

£173

27%

2010

£844

£694

£150

22%

2011

£971

£712

£259

36%

2012

£1,082

£726

£356

49%

2013

£1,118

£739

£379

51%

2014

£1,197

£759

£438

58%

2015

£1,279

£789

£490

62%

2016

£1,298

£809

£489

60%

Source: Countrywide

 

Table 2 – New lets

Region

Ave Rent Nov-16

Ave Rent Oct-16

Ave Rent Nov-15

November Rent YOY

Greater London (excl central London)

£1,284

£1,302

£1,292

(0.7%)

Central London

£2,402

£2,475

£2,383

0.8%

East of England

£981

£996

£941

4.3%

South East

£1,138

£1,150

£1,098

3.6%

South West

£835

£850

£811

3.0%

Midlands

£671

£702

£662

1.4%

North

£656

£674

£627

4.7%

Scotland

£677

£700

£671

0.9%

Wales

£632

£688

£643

(1.8%)

Total

£925

£947

£907

2.0%

Source: Countrywide

 

Table 3 – Re-lets

Region          

Ave Rent Nov-16

Ave Rent Oct-16

Ave Rent Nov-15

November Rent YOY

Greater London (excl central London)

£1,192

£1,209

£1,139

4.6%

Central London

£2,456

£2,440

£2,417

1.6%

East of England

£911

£930

£878

3.8%

South East

£1,025

£1,109

£1,030

(0.5%)

South West

£764

£811

£732

4.3%

Midlands

£650

£645

£619

4.9%

North

£617

£622

£609

1.3%

Scotland

£635

£640

£598

6.1%

Wales

£571

£636

£587

(2.7%)

Total

£865

£888

£842

2.8%

Source: Countrywide

 

For further information please contact: 

Countrywide plc

Group Press Office

Tel: +44 (0) 7721 439043

Email: press.office@countrywide.co.uk
Visit: www.countrywide.co.uk                                  

 

Notes to Editors:

About Countrywide plc
Countrywide is the UK's largest integrated property services Group, including the largest estate agency and lettings network.  Countrywide’s network of expertise combining national scale and local reach helps more people move than any other business in the UK and is structured around four key business units: Retail, London, B2B and Financial Services.

 

 

Countrywide plc’s award-winning service has earned the business over 231 high-profile industry awards since 2008 with customers voting Countrywide Best National Agency Group at the 2015 ESTAS awards. 

 

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