Gap in rents between north and south of England at new low

The gap between rents in the north and south of England has narrowed to its closest point in a decade.
Research from Hamptons, the estate agency, found that the average rent in the south was £357 per month more than in the north in August, the lowest figure since the agency started keeping records in 2013. It equates to 37 per cent more than in the north.
In London, the east, the southeast and the southwest of England, year-on-year rental growth has cooled from 8.7 per cent in August last year to 5 per cent this year. Meanwhile, the rate of growth in the north is at 9.6 per cent, almost unchanged.
Aneisha Beveridge, the head of research at Hamptons, said the figures showed landlords were slowing rent rises in the most expensive areas of the country after introducing large increases over the previous year because of higher mortgage interest rates. She said that, in the main, this was because of “affordability pressures”, as renters could not manage to keep up with rises.
There is also an indication that high mortgage interest rates, which have hit landlords hard in the past two years, are easing and that investors are feeling less of a pinch.
The change has been most dramatic in the capital, where rent rises were 2.1 per cent in greater London in the year to August, reaching £2,381 per month, a large reduction from the 17.1 per cent recorded in August 2023. The rate of growth in outer London was 0.5 per cent.
In the north, rent has kept rising fast. This area encompasses the northeast, the northwest and Yorkshire and the Humber.
Beveridge said investors were “starting to think about the upcoming budget”, in which it is thought that Labour may raise capital gains tax, a levy on the profit made from selling a second home. It stands at 24 per cent for higher and top-rate taxpayers, but there has been speculation that the government intends to align the rates with income tax in the budget, which would raise the rate to 40 per cent or 45 per cent for top earners.
As mortgage interest rates fall, there are suggestions that the property market is beginning to pick up pace this autumn, with Rightmove announcing that average new seller prices have risen by 0.8 per cent this month to £370,759 , double the typical percentage rise for September.
In addition, the number of sales being agreed is up by 27 per cent year-on-year as buyers gradually become more confident about buying and selling property with interest rates falling. The number of new sellers coming to the market has increased by 14 per cent and the average number of available homes for sale per estate agent is at its highest level since 2014.
However, Rightmove said that buyers remained particularly nervous and that sellers must market their properties at reasonable prices.