UK rents are rising fastest for 3 bedroom homes, which climbed 4.6% year-on-year in August compared to a rise of 3.3% for all UK properties, according to the first monthly Landbay Rental Index, powered by MIAC.
The peer-to-peer property platforms index is the first to track rental trends to the county and London borough level in combination with the number of bedrooms.
Areas to lead the rental growth of 3 bedroom homes are mainly located within commutable distance of London, such as Windsor and Maidenhead (up 22% to £1,936), up-and-coming Southend on Sea (up 20% to £1,121) and Swindon (up 13% to £813). The top ten all saw annual rent increases of over 10%.
John Goodall, co-founder and CEO of Landbay, said: “Rents for 3 bedroom family homes are racing ahead of the rest of the market at the moment.
“This trend is particularly strong in commuter hotspots outside of London, with 12 of the 20 areas with the fastest growing 3 bedroom rents within an easy commute of the capital.
“The jobs market is firing on all cylinders at the moment, and it looks like professionals with families are relocating to where the best paying jobs are. People relocating for a new job often rent first and buy later. Renting is a great way to settle into a new area fast – and to ‘try-before-you-buy’ to see if you actually like living there.
“For investors in the private rental sector, our data makes family homes in the southeast look like an attractive proposition. As well as performing well now, rents for 3 bedroom homes saw the smallest falls when rents dipped in 2013. The challenge for investors looking to benefit is finding suitable properties for professionals at a cost that produces a good yield.”
UK-wide rents climb, but pace of growth slowing
Topline graph and results from national rental prices Across the UK as a whole, rents climbed by 3.3% in the last year to £1,281.
The rise is well ahead of inflation (CPI grew by 0.1% in the year to July 2015), and closely tracks wages which have climbed 2.9% in the last year (ONS, May-July 2015 compared to a year earlier).
The Landbay Rental Index reveals that while rents continue to climb year on year, the rate at which they are growing has eased from a high of 4.9% in February.
Average UK rents fell between May and July 2015, with August seeing the first monthly rise in rents since March.
Across all property sizes, the top rental risers outside of London were Southend on Sea (up 12.6%), York (up 12.1%) and Wrexham (up 11.1%).
The biggest fallers were Cheshire (down 6.9%), Aberdeen City (down 5.7%) and Buckinghamshire (down 3.5%).
Goodall added: “At the national level, rents performed very strongly in 2014 after a dip in 2013. This year has seen rents continue to grow, but at a slower rate.
“The macro trends at the national level aren’t uniform when you drill into the local level and look at different types of property, which is why we want to establish a rental index that gives landlords, tenants and others interested in the private rented sector access to a more granular level of insight.”