Rents are growing faster in the north of England and Scotland than in the south, according to a survey of 50,000 properties compiled by the country's largest estate-agency group, Countrywide. The data highlight the risks to buy-to-let landlords raised by the recovering housing market and Help to Buy, the government's flagship scheme to boost ownership.
The average monthly rent in the South East was £1,090 in the third quarter, according to the Countrywide Quarterly Lettings Index - down 1.5 per cent from £1,107 in 2012. That compared with growth in excess of 4 per cent in Scotland, Wales and the north of England. Rental growth in the South West and East Anglia fell between these two extremes, at 1.5-2 per cent.
Rental data from lettings agencies can be volatile and contradictory. Yet Richard Donnell at Hometrack, a housing analytics firm, says data from asking prices also point to a market reversal, with London underperforming the regions after three years of 5-10 per cent growth. "What nobody seems to have noticed is that the London rental market has come off the boil," he says.
The boom in London housebuilding is one factor, affordability another - London rents are already very high relative to incomes. Yet the current signs of recovery in the housing market, combined with easier credit, are probably also drawing more affluent renters into owner-occupation - both in London and the home counties. This trend is a double-edged sword for landlords, who may see their paper profits rise with house prices, but at the same time experience potentially costly voids.
But Mr Donnell believes only high-end landlords with rich tenants are likely to face problems, with the home-ownership ladder still out of reach for the mid-market. The monthly payments on the cheapest Help to Buy mortgage will be 21 per cent higher than the rent on a comparable two-bed property, he calculates. "How many people can rustle up an extra £150 a month?"
