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Housing


15 February 2019

UNITED KINGDOM: Rental growth since the Brexit vote

Since the Brexit referendum, rental growth rates in London have stagnated, whilst in areas across the UK have been slowed.

Average rents

  • Scotland - £746
  • Northern Ireland - £573
  • Wales - £656
  • England outside of London - £776
  • London - £1898

Rental growth

London

Rental growth in the capital is now 2.84%-4.15% lower than expected back in June 2016.

It can be argued that London's property market has suffered disproportionately from uncertainty since the referendum, with an average annual rental growth drop from 1.26% in June 2016 to a low of -0.33% June 2017, before a slow recovery in February 2018 (0.05%) up to 0.58% in December 2018.

London's property market saw annual rental growth drop from 1.26% in June 2016 to a low of -0.31% in June 2017, before starting a slow recovery up to 0.67% in January 2019. In total, cumulative rental growth in London since June 2016 has been a mere 0.52%.

Wales

Annual rental growth in Wales is at its lowest since April 2014.

Scotland

Rental growth in Scotland is led by high annual growth in Edinburgh at 5.88% and and a rise of 3.56% in Inverclyde. Rents have fallen, however, by 6.62% in Aberdeen, without this the Scottish average would be much higher.

England (outside of London)

Since the UK voted to leave the European Union in June 2016, total rental growth across the English regions is 3.69%, seven times higher than of London at 0.52%.

  • North Eastgrowth of 0.71%
  • East Midlands - growth of 6.28%
  • West Midlands - growth of 4.75%
  • England (excluding London) - growth of 3.69%
  • England (including London) - growth of 2.5%

A 'Nationwide rental growth slowdown... but the cost of renting a property stays high'

John Goodall, chief executive officer of Landbay explains ‘Falling rents in London have masked relatively strong growth in the rest of the UK since the Brexit vote, but we are now firmly in the midst of a nationwide rental growth slowdown. This may be some relief to renters, but the cost of renting a property remains high.’

'House prices continue to outpace wage growth'

‘House prices continue to outpace wage growth, dampening the ability of aspiring home owners to save for a property of their own, meaning demand for rented accommodation remains robust’

‘Without a radical house building plan for both first time buyers and purpose built rental properties, there is no way supply will ever be able to catch up with demand. The government needs to take action fast, especially in times of economic and political uncertainty the private rental sector is more important than ever,’ he explained.

What this means for the client

Employers should make sure they understand the rental market between regions and appropriately manage the expectations of the relocating assignees, especially as rental rates remain high. Location also plays a big factor and so having well-informed local agents advising will ensure the right properties are selected with the best value.

 

 

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