Provincial cities around the UK are providing best rental value for tenants in the private rented sector. Plymouth, Cardiff and Leeds are the cities with the least expensive properties for renters, compared with average local monthly income.
The figures will give investors in the private rented sector a feel for their options, if investing in rental property across the UK. While there are other factors coming into play, such as the local balance of supply and demand, the relative costs of renting in different locations will show how much scope the market may have for future rental increases.
The analysis by insurance provider HomeLet ranks Plymouth as the best value rental location, with a home there costing just 27% of net income in monthly rent. Next cheapest is Cardiff, at 29% while Leeds is priced at 34% of net income. Following in fourth equal are Norwich and Glasgow, where rents are measured at an average 35% of local monthly incomes.
The most expensive location is, unsurprisingly, London, where rents are typically 49% of net income. But not far behind them are Edinburgh and Birmingham, where rents still absorb 47% of incomes, while university cities Cambridge and Bristol are not much cheaper, with rents at 43% of income.
“Our analysis of the affordability of renting in the UK’s major cities has produced some surprising results,” said Martin Totty, chief executive of HomeLet group’s parent Barbon Insurance.
Evidence has been mounting in the greater London area that rents have reached an affordability ceiling in some areas but Totty said the findings show this to be a wider issue. “In some parts of the UK, such as Scotland and East Anglia, where rental prices are now falling or stagnant, the data tells us that renting in some cities in these regions is still stretching tenant affordability.”