What:
Although the rate of increase in English private sector rents fell from 1.5% per annum in August 2020 to 1.2% in August 2021, seven of the ten English regions in fact recorded stronger rental growth.
In the North West, annual rental growth rose by one percentage point to 2.2% while the South East recorded an increase of 0.6 percentage points to 1.6%. The strongest increase in annual rents was witnessed in the East Midlands (+2.7%) followed by the South West (2.6%).
London was the only region in which annual rents declined. The 0.4% fall contrasts with a 1.3% increase in August 2020. This remains well below target inflation (2% y/y), but above February CPI which registered 0.7%.
Why:
The challenges posed by the pandemic appear to have encouraged many renters to spurn London in favour of the regions as they are no longer required to commute to the office on a daily basis.
This increased demand, coupled with a lack of available rental properties in many areas outside the capital, has continued to push asking rents upwards over the past 12 months.
Research from Rightmove shows that the number of empty rental properties outside of London is down by 54% compared to this time in 2019, whilst in London it is up by 19%.
