Regeneration cities in England see the strongest rental growth

Regeneration cities in England see the strongest rental growth

Rents across the country are seeing a steady rise, but it’s cities that have gone through extensive regeneration that have seen the strongest growth in rents and demand.

Online property portal Rightmove has released its latest quarterly rental index and it demonstrates a steady rise in rents across the UK. The South East of England stood out as the strongest performer with a quarterly increase of 4.5%, closely followed by the North West with a quarterly rise of 3.7% (this region also saw the highest annual rise of 4.4%). Greater London was the only region that saw a decline last quarter, but the capital saw an annual increase of 3%.

Overall, asking rents across country have performed well, reaching an all-time high of £817 per month. It is believed this is a result of an ongoing shortage of rental properties and growing demand from tenants.

However, the areas that have seen the most impressive growth in rent are regional cities that are undergoing extensive regeneration. According to data gathered by the letting agency Bunk, asking rents in regenerated cities have increased by 21%, compared to the average growth of 16% throughout the country.

Of the 12 cities examined, Manchester had the strongest growth in rents, with an increase of 38% since 2014. The city is an excellent example of how regeneration can transform a rental market – Manchester has received extensive investment in recent years and now competes on a global scale in many sectors. As a result of this, the city has attracted businesses and young professionals in their droves, which has driven the demand for rental accommodation.

Cambridge follows Manchester, with an increase in rents of 31% in the last five years. The population in the city has increased by 14% and this level of growth in Cambridge is only set to get stronger with a further 200 homes in the pipeline.

Other cities that performed well in the study included Newcastle (31%), Bristol (29%) and Portsmouth (19%). Most of the cities looked at in the study were also home to universities, where the boost in regeneration and asking rents could be a result of students choosing to stay following graduation.

Co-founder of Bunk, Tom Woollard, said of the results: ‘Regardless of your opinion on gentrification, one thing is clear. These transformations are positive in terms of the level and quality of housing stock being provided and there is certainly an appetite for these developments and for housing in areas to have seen drastic improvements.

‘The silver lining for the nation’s landlords is that this maintained demand pushes up prices and these areas provide a very good return on investment in a landscape that is currently rather tough.

‘For those looking to invest, the best option is to get in early to an area that has been earmarked for regeneration but is still affordable at present, and you should see a healthy return despite the changes to the sector of late.’

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