Manchester (4.9%) and London (4.6%) both saw rental growth pick up on a year ago, defying the wider slowdown.
Amongst other key cities, annual rent inflation has fallen towards zero or even below. Birmingham rents have changed from +7.5% to -1.7% on the latest data versus a year ago – the sharpest reversal in the group and the only city with rental declines.
Bristol and Leeds have seen growth slow from among the fastest (8.9% and 6.0%) to near zero (1.9% and 0.0%). Brighton has also cooled, down from 4.7% to 1.6%
The divergence highlights slightly different timing of rental cycles. London and Manchester’s rental cycles peaked earlier and slowed earlier, whereas some of the regional cities have seen rental growth later in the cycle.
The earlier peak for London and Manchester has allowed a period for earnings to catch-up, such that the market is now on a more stable footing (although average affordability is still stretched).
For those markets that have seen a later peak in the rental cycle, it is important that earnings now enter a catch up phase before the market can move forward again. Source: Dataloft by PriceHubble