Research from Build to Rent specialists, Ascend Properties, has revealed which areas of the English rental market have performed the strongest since the 2008/09 recession where the growth in average rental income is concerned.
Ascend analysed rental market values during the last property market crash and found that the average rent in England fell from £699 per month in 2008 to £678 in 2009. However, since the end of the recession, rental market values have climbed by 20% to £814 per month during 2020, despite the problems posed to the sector as a result of the pandemic.
However, this rental market revival has been far stronger in some regions and none more so than the London market. The average rent across the capital sat at £977 per month in the wake of the last economic downturn. However, today, the average rental income in London has climbed by 68% to £1,638.
The South East has seen the second-largest increase in monthly rental values, climbing 39% since 2009, with the West Midlands (25%) and East Midlands (23%) also seeing above-average growth.
But even in the North East where this rate of growth is at its lowest, the average rental property is still commanding 10% per month more (£607) when compared to 2009.
Yorkshire (11%), the South West (17%), the North West (17%) and East of England (19%) have also seen a considerable increase.
Managing Director of Ascend Properties, Ged McPartlin, commented: “It’s fair to say that pandemic uncertainty may have caused hesitation for some when looking to invest within the rental market, particularly in areas such as London where demand has dropped due to the enforced trend of working from home.
However, while Covid uncertainty has created a tricky landscape in some respects, we remain a world away from the financial crisis of 2008 and many remain reliant on the rental sector in order to live.
It also remains clear, that much like the wider housing market, any periods of instability are relatively short-lived and we’ve seen strong and consistent growth across the board as a result.
For the professional investor who may be worried about a potential bump in the road, the build-to-rent space could be the best route to help mitigate any concerns. Not only does the sector provide a higher rental premium to begin with, but the lifestyle offering it provides attracts those with a longer-term view to renting. As a result, residents often rent for far longer terms than the traditional 12 months, providing a more stable stream of income and fewer void periods.”