While the gap remains 26% wider than it was in 2010, slowing rental growth across much of the south this year has lead it to narrow as a two-speed rental market seems to be emerging in the UK.
The south of England failed to feature in the 10 cities with the highest rental growth over the past 12 months, while seven of the cities were rents are growing most slowly were in the south.
Oxford, Cambridge and London saw the largest slowdown in growth, while Manchester registered the highest growth with rents of new lets rising 7.1% over the last year; three times faster than the national average of 2.2.%.
At a regional level, the average rent in the north of England now stands at £692 per month, compared with £1,100 in the south. In the capital, rents are rising fastest in outer London, while across central and inner London they remain broadly unchanged on last year.
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 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.”
