The West Midlands has experienced a small property rental boom in the last 12 months with room rents increasing by over 11 per cent, according to the latest figures released by house and flat-share website Spareroom.co.uk.
In a list of the top ten UK cities and towns that have experienced the largest rise in average rents over the past 12 months, the top two spots are filled by town/cities in the West Midlands.
Top of the pile is Stoke-on-Trent where average monthly room rents increased by 11.3 per cent in the past year, while the Shropshire town of Telford saw a 10.8 per cent rise in room rents in the same period.
Five of the top ten towns/cities that experienced the largest rise in average rents were in the north of England, where average monthly room rents increased by 1.5 per cent over the past 12 months. No towns/cities in the south of England featured in the list. Average monthly room rents in the south rose by 0.6 per cent in the past year.
During the early part of 2009, an influx of accidental landlords onto the rental market put a strain on rental yields, as an over-supply of rooms forced average monthly rents down in many areas, said Spareroom.co.uk. However, for many areas of the country, the past 12 months has still proved extremely challenging, not least in the north-east, where Sunderland saw average monthly room rents fall by 13.5 per cent since the start of 2009, according to Spareroom.co.uk figures. Towns and cities in the North of England also fill eight of the top ten biggest annual fallers in average monthly rents.
Of the major UK cities, average monthly room rents in London and Manchester increased by 1.2 per cent and 1.3 per cent respectfully in the past year, while average room rents in Birmingham fell by 1.2 per cent in the same period. The following table shows the 10 UK towns and cities that have experienced the largest rise in average monthly room rents during the past 12 months.
Despite many towns/cities across the country seeing rental values fall in the past year, overall, the rental market has remained resilient in the face of a faltering economy, with average monthly room rents up 0.2 per cent in the past 12 months. Scotland has seen a 1.9 per cent increase and Wales a 0.7 per cent fall in average monthly room rental values in the same period.
Matt Hutchinson, director, Spareroom.co.uk, said: “What we’ve seen since the middle of 2009 is a semblance of normality returning to the rental market, albeit against a backdrop of continued economic uncertainty. Rental yields were hit particularly hard in the first half of 2009 as accidental landlord properties saturated the market.
“For many homeowners, the hope of surviving the recession by renting out their properties were dashed, as supply significantly outstripped demand, and rental properties languished on the market without tenants to fill them. Word spread quickly that renting in the short term may not be a viable financial solution, and as a result we saw a significant drop in accidental landlord properties coming onto the market in the second half of 2009. This has played a major part in the slow recovery in average monthly rental values, since the middle of last year."
Spareroom.co.uk has launched the Raise the Roof campaign, calling for improved tax breaks for householders who rent out spare rooms to lodgers under the Government’s Rent a Room Scheme.
Through the Rent a Room Scheme, householders can receive an amount of tax-free income from renting out a spare room. The tax-free threshold currently stands at GBP 4,250, and the Raise the Roof campaign is calling for the Government to raise this threshold to GBP 9,000 per annum, which will encourage more people to take in a lodger.
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