London commuters blamed as Eastern England experiences largest rental increases
The effects of higher rental prices in London are pushing the capital’s workers further out in search of cheaper rent, pushing rental prices up in the East of England to four times the national average in July.
Landbay Rental Index released data indicating that 2.35% year-on-year growth in the Eastern region underlined the affordability issues that younger workers face when working in London – and the need to move to cheaper rental areas.
With improved transport networks, living outside of the M25 whilst working in London has become a growing trend for many who are unable to afford the high cost of rentals in London.
High on the list of places London workers are relocating to are Luton, Peterborough, Thurrock and Bedfordshire. Consequently, these areas have all experienced substantial rent increases over the past 12-months, with Luton top of the pile at 4.23% growth.
However, prices in all of these places remain less than half the London average, despite London rents falling by 1.05% over the same period.
Whilst areas in the east have seen big increases, the average UK growth rate was 0.64%, a figure less than half the 1.83% rate seen at the end of July 2016.
The statistics for the Eastern region were even more pronounced, as just three of the 19 counties in the South East saw rental increases grow above 2%.
John Goodall, chief executive and founder of Landbay, said:
“With rising inflation and rock-bottom interest rates it is little surprise to see demand in the more affordable Home Counties rising faster than pricier parts of London and the South East.
“Naturally these surrounding areas are starting to experience a surge in rental prices, creating a ripple effect out from the capital. There are of course a number of factors at play, but as yields tighten in the capital, landlords may well be branching out to the East of England in a bid to meet this demand.”
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.