Most Southern cities have seen rental growth slow over the course of 2016. Seven of the 10 cities where rents are growing most slowly are in Southern England. Oxford, Cambridge and London have seen the largest slowdown in growth and all have dropped at least five places from last year. In the capital, rents are rising fastest in outer London, while across central and inner London they remain broadly unchanged on last year.
Greater price sensitivity has caused rental growth to slow across the South. The proportion of landlords cutting the asking rent has doubled over the last 12 months in cities in Southern England. In September, Cambridge (18%) and London (17%) saw the largest proportion of homes with a cut in the asking rent.
A spike in the number of homes available to rent since April’s Stamp Duty change, has given tenants more choice, increased competition among landlords and slowing the rate of rental growth.
Commenting on the findings, Johnny Morris, Research Director at Countrywide said:
“With London rents growing at the slowest rate since the downturn (2008) and Northern cities recording rent rises three times as large as their Southern counterparts, there are signs that the North-South rental divide is starting to close. Although at current rates it would take at least five years for the gap between rents in the South and North to close back to 2010 levels.
“As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost to the rental market. Overall this is yet to stoke rental inflation, but September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends, 2017 could be the first time since the 1930s that more homes are let than sold.”