Rental hotspots: affordable locations for 2016
Renting is not cheap! But if you know where to look, there are still deals to be had. Here’s a raft of hotspots for those in search of their next rental home
Once we were a nation of shopkeepers. Today, it seems, Britain is becoming a nation of renters. The sector is booming, often fuelled by the eye-watering cost of home ownership and a lack of supply. Almost five million UK households are now private renters, a figure set to expand by more than one million over the next five years, according to Savills. And one thing we like even more than renting is a good bargain. Welcome to generation rent.
Renting, it should be said, is not cheap. In 2015, according to the Homelet Rental Index, the average UK rental value, excluding London, was £740 per month – up 5.5% on 2014 (£702 per month). And the imminent changes to buy-to-let taxation will lead to further undersupply of rental homes, amid fears that landlords may sell up in their droves. But if you know where to look, there are still deals to be had.
Here we explore a raft of rental hotspots for canny tenants in search of affordable properties – or value for money for properties in more expensive areas.
The Valuation Office Agency, part of HMRC, produces useful data and property advice to help the government with taxation and benefits. In its latest summary of the private rental market for England (2014-2015), it has identified the most expensive and cheapest median monthly rents. Inner London, not surprisingly, is the most expensive (£1,387 per month for a single person to rent a one-bedroom flat – 66% of a London man’s average post-tax earnings). Leicestershire, on the other hand, is the most affordable place to rent in England. Here, it costs a mere 23.2% of the median local post-tax wage.
The Home Counties might not be the most affordable place to rent in the UK. In fact, rentals are amongst the highest outside London (in Esher, for example, tenants pay an average of almost £2,000 per month). But times are changing, even in this well-heeled corner of the South East, as Knight Frank’s latest Home Counties Lettings Index report reveals. “Our agents note that the number of properties available to rent across the Home Counties has been steadily rising over the last year, as an increasing number of owner-occupiers enter the prime rental market and higher tax burdens are felt by potential buyers. As a consequence, this has ensured greater flexibility from landlords on rents and started to tip the balance in favour of the tenant.”
Significantly, Knight Frank’s report adds: “Prime rents in the Home Counties fell by 0.3% in the final three months of 2015 as landlords looked to keep void periods to a minimum and remain competitive. It follows a 0.8% drop in the previous quarter.”
It’s always a good sign if tenant demand picks up in an area and in Bermondsey, it was up by almost 10% in 2015 compared to the previous year, according to Laura Kitts of Chestertons, Tower Bridge. The number of homes to let was also up – by more than 50%. “The good transport links and ongoing regeneration in the area have attracted young professionals who are keen to take advantage of the lower rents, compared to more central locations. They are also able to enjoy local attractions such as Tate Modern, Shakespeare’s Globe, Borough Market and the wide range of independent shops and restaurants,” says Kitts. “The higher rents are found up by the river, but as you come away from it, there are plenty of properties to choose from – new-build, period and industrial conversions aplenty.” And for how much? “A typical one-bedroom flat suitable for a young professional couple, who want to be within walking distance of Zone 1 and the City over London Bridge, can be had for around £350 per week. A two-bedroom place will probably be available from about £440 a week.”
The private rental market in Brentford is relatively small (only 18% of households, compared to the London-wide average of 27%), but it’s growing. Daniel Killick, Director, Chestertons Kew, is bullish, believing there are bargains aplenty. “As with the sales market, there is great value to be had in Brentford, and commuting to the city centre is relatively easy. It’s also well placed for Heathrow and offers good road access to the M25, the M4 and M40 for those weekend and holiday getaways. The revitalisation of the town centre will make it a more attractive and vibrant place to live and work for both families and young professionals. As a result tenant demand is strong and rising, and Brentford is particularly popular with those who work for big corporate employers in the City, the West End or indeed locally, with the likes of GlaxoSmithKline, JCDecaux and Sky TV being based in the area. Young professionals will typically favour a modern two-bedroom apartment, while families may prefer to look for a detached or semi-detached period property close to one of the good local schools. All are in striking distance of the river, with the delights of Kew Green and the Royal Botanical Gardens just over the bridge.” An average two-bedroom house rents for around £1,950 a month, Killick adds.
This corner of South East London is still relatively undiscovered and, as a result, offers good value and plenty of choice, without compromising on transport links or amenities. Though rents are increasing, new one-bedroom apartments can still be had at Greenwich Peninsula for around £300 per week, according to Alex Britez, Chestertons Greenwich & Blackheath, while modern two-bedroom apartments are available from about £345 upwards.
“The Peninsula is increasingly popular – North Greenwich Station offers excellent links to the City, the West End and Westminster via the Jubilee Line, while the O2 offers a cornucopia of world-class entertainment, from Adele and Ellie Goulding to Strictly Come Dancing, the X Factor or the ATP World Tour Tennis Finals. If you move your search to historic Greenwich, then one-bedroom properties start from under £300 per week and two-bedroom flats from around £340. Transport links are still very good, with Greenwich Station and Cutty Sark DLR offering fast and convenient connections to Canary Wharf, plus there are excellent cafes, bars, restaurants and the famous weekend market. The popular Maritime Museum, Cutty Sark and the Royal Observatory mean there’s always something to do on a rainy day or for weekend fun with the family, too. For the ultimate bargain-hunter Charlton (SE7) and Woolwich (SE18) offer even more competitive rents, while still benefiting from good transport links, river views and plenty of open-space.” And don’t forget the London Marathon, which begins in nearby Blackheath and takes you through some higher-priced rental quarters of London, just to make you feel better.
Wandsworth is perennially popular with buyers and renters, owing to the good transport links, acres of quality parks and commons, and famously low council tax, according to Adam Jennings, Chestertons Wandsworth. But does it represent value for money? “Despite the continuing clamour to move in, there are still plenty of pockets of value to be had in the borough,” Jennings says. “Earlsfield and Wandsworth Town are perfectly suited to tenants aiming to keep a close guard on the purse strings. With the area growing substantially thanks to many developments, prices of one and two-bedroom flats can vary significantly. For example, flats in the new Knightley Walk building within the Riverside Quarter development range between £370 per week for a one-bedroom flat, to £460 per week for a two-bedroom flat. Keeping an eye on the market and giving yourself as much time as possible to look for properties is key in Wandsworth. Areas adjacent to the Battersea Power Station development will be improved dramatically by the infrastructure investment and rents will rise as the major schemes complete, so keep an eye on streets and housing developments around these major schemes – getting in there early can be a really good way of securing a tenancy at below market rates.”
Others areas to watch:
The North West has seen a continued reduction in rental value over the past seven months. The average rent in January 2016 was £624 – 3.4% down on January 2015. Monthly rents remain surprisingly low in Liverpool, despite investment in infrastructure and communication links.
Plymouth, highlighted in 2015 by Homelet as Britain’s most affordable city to rent a home in, remains good value for money. The city council and its Get Plymouth Building campaign is leading the way with various affordable housing initiatives, including Rentplus homes which are available at 80% of the local market rent rate for between five and 20 year tenancies, after which the properties can be bought by tenants.
Student cities are often good places for cheap rents, and Belfast is no exception. Last year, NatWest’s Student Living Index voted the city as the most affordable place for students to live and work in the UK. Belfast’s students spend the least amount on rent-per-week – just £46, compared with £112 in Oxford.
If you are searching for your next student home, make sure you search our dedicated student directory at OnTheMarket.com.