Everyone knows the extent of house price rises, particularly in London and the South East, but are you aware of how big the divide is between rents in the South and North?
Rents Soar in London
Rental costs in London have soared by 45% in the last ten years. In 2007, the average rent for a property in London was £1,107. Today, it is £1,609. This is the worse hot spot, but tenants in the South East and East of England have not fared much better. In the South East, rents have risen from £848 to £1,085 and in the East, from £740 to £937. Yet the situation is very different in the North.
Rents Fall in the North
In Yorkshire and Humber, rents have remained static whereas, in the North West, they have dropped by 7%, falling from £624 to £581. In the North East, rents have fallen from £539 to £519.
Employment Growth Fuelling Rent Rises
Experts say this is largely due to greater employment growth in London and the South East. Job opportunities have risen by 12.5% in London whereas employment growth in Manchester is only 5%.
Another strong driver of rental prices in London is the rise in homes occupied by multiple tenants.
Landlords can charge higher rents in London because groups of tenants share a property and club together to pay the rent. However, affordability in London is sorely stretched and people are paying nearly half their monthly income on the rent. As a result, rents in the capital are likely to fall by 2-3% this year.