Edinburgh has been revealed as having the UK’s fastest growing rents with the average annual rent rising by 4.63% in 2018, according to Landbay.
The buy-to-let lender’s third edition of the National Rent Review found the Scottish city narrowly beat Nottingham - where rents have increased by 4.62% over the past 12 months - into second place,
Overall, rents across the UK rose by 0.97% - meaning that rents in Edinburgh and Nottingham are growing more than four times faster than the national average.
The report, underpinned by rental analytics from MIAC, found that 13 different parts of the UK have seen rents rise faster than the CPI measure of inflation, which currently stands at 2.3%.
Meanwhile, rents have been falling in 20 different areas, with Aberdeenshire recording the biggest decline at -7.00%. In fact, the bottom five areas are all in Scotland, with Aberdeen (-6.23%), Angus (-1.75%), Moray (-1.26%) and South Ayrshire (-0.68) completing the list.
Elsewhere, six London boroughs (Barnet, Brent, Enfield, Harrow, Kensington & Chelsea and Hillingdon) have also witnessed declining rents this year – although, overall, London saw a rise of 0.58%.
“There is no doubt that the private rental sector has seen a geographically varied performance throughout 2018,” John Goodall, chief executive officer and co-founder of Landbay, said.
“However, in the context of Brexit uncertainty and recent tax and regulatory changes for landlords, these figures show just how resilient the market continues to be.”
He said that with rental growth standing at 0.97% across the UK, cities like Edinburgh and Nottingham have put in an ‘impressive shift’, significantly outperforming London.
“On the face of it, the scale of declining rents in Aberdeenshire and Aberdeen may appear concerning, however, the reality is that these are exceptions, linked to issues surrounding Scotland’s oil industry,” Goodall continued.
Landbay’s National Rent Review also highlighted that one-bed rents (1.07%) in the UK grew faster than two (1.02%) and three-bedroom (0.98%) properties in 2018. The average rent for a one-bed now stands at £1,031, while a two and three-bed stands at £1,173 and £1,347 respectively.
Historically, growth in three-bed properties has been stronger, as demand from more families entering the market has pushed up prices. However, the number of new-build detached properties being built has significantly increased since the start of 2008 while the number of apartments has decreased at the same time.
“A number of factors are creating demand for smaller properties,” Goodall added. “A shortage of new smaller properties entering the wider market as well as higher tax burden on larger homes has put upwards pressure on rents for one and two-bed properties as professional landlords seek sustainable yields.”