In the UK's rental market, landlords in London are experiencing a significant boost in rental incomes. The latest data reveals that rent in London has increased far beyond other regions. According to analysis by estate agents Benham and Reeves, from March 2023 to March 2024, the average rent in London increased by 11.2%, with monthly rents rising from £1,848 to £2,055.
Benham and Reeves analyzed the latest rental market data from the Office for National Statistics, studying the annual changes in average monthly rents across different regions and local authority levels in the UK. As of March 2024, the average rental cost across the UK rose by 9.1%, reaching £1,246.
At the regional level, London tops the chart with a rental growth rate of 11.2% year-on-year. Scotland emerges as the only region in the UK to see double-digit rent growth last year, with a growth rate of 10.5%.
At the local authority level, Brent saw the highest rental growth rate in the UK, with rents in the London borough skyrocketing by 27% within a year, increasing from £1,527 per month to £1,940 per month. Greenwich (15.8%) and Islington (14.2%) also feature among the fastest-growing rental hotspots.
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Folkestone and Hayes rank second in the UK with a 22.5% annual increase in rents; Birmingham ranks seventh with a 14% increase; while Oldham (13.9%) and Ipswich (13.3%) rank ninth and tenth, respectively. Scotland's Lothian (15.7%), West Dunbartonshire (14.4%), and Argyll and Bute (14.0%) also make it to the top ten.
The Scottish government had imposed a ban on rent increases from September 2022 to April 2023, with most rent increases capped at 3% thereafter until the end of March 2024. It remains unclear whether rent control will be reintroduced, but some argue that the policy may have actually driven up rents as landlords may have left the industry due to uncertainty, thereby reducing supply.
Mark von Grand, Director at Benham and Reeves, commented, "London's appeal remains as strong as ever, with demand particularly robust in Brent, Greenwich, and Islington. Despite challenges such as rising mortgage rates and energy costs, this is a positive sign for landlords. Recently, we've seen rents increase significantly, some by as much as 45%, but this high rental growth is not limited to the capital. Every region is experiencing strong growth, especially Scotland."
While some landlords may choose to exit the market due to market fluctuations, for those who persevere, the high demand for rental properties from tenants presents more lucrative opportunities. The rental growth in London and Scotland indicates that despite market fluctuations, high-quality rental properties still hold strong appeal and investment value.
