New report shows the north/south gap is disappearing
A cheaper cost of living has long been associated with living in ‘The North’. Where South becomes North is an uncertain line, and as someone from Yorkshire, I’m pretty sure that anything South of there is not North. But wherever that line is, it seems like we are getting closer to it.
Rents in the north and south of England are narrowing, with a recent study showing that the rental gap between the two regions has reached its lowest level in a decade. Research conducted by Hamptons estate agency reveals that in August, rents in the south were just £357 more than in the north, marking the smallest difference since 2013.While rental growth in the southern regions, including London and the southeast, has slowed down from 8.7% to 5%, the north has seen a consistent rise of 9.6%.
Aneisha Beveridge, head of research at Hamptons, attributes the slowdown in southern rent hikes to "affordability pressures," as many tenants can no longer handle steep rent increases, which had been driven in part by rising mortgage rates. However, with mortgage rates beginning to stabilise, landlords seem to be easing the pressure in more expensive areas. London, in particular, saw significant cooling, with rent growth dropping to just 2.1% in Greater London and only 0.5% in outer London. Conversely, northern regions like Yorkshire, the northeast, and northwest continue to see rapid rent increases.
The evolving property market has also influenced governmental actions. Ministers have introduced reforms in the Renters’ Rights Bill aimed at curbing bidding wars that push rental prices higher. As part of this initiative, landlords will be banned from accepting more than the advertised rent price, in an effort to prevent competitive bidding and stabilise rent increases. Polly Neate, CEO of the housing charity Shelter, called it a "watershed moment for renters," praising the government for addressing bidding wars that have long been a barrier for many – the reality is that this may be yet another straw for the BTL market’s back.
Landlords are justifiably concerned that this measure could backfire, with some predicting that it might lead to increased listed prices. An industry expert suggested that landlords may respond by advertising properties at higher prices from the outset.
In addition to banning bidding wars, the Renters’ Rights Bill includes several other reforms, such as prohibiting landlords from evicting tenants within the first year of tenancy and banning no-fault evictions altogether. Housing Minister Matthew Pennycook emphasised the government's intent to "level the playing field" between tenants and landlords, ensuring better protection against arbitrary rent hikes and evictions.
While these reforms aim to alleviate the pressure on renters, the market remains in flux as both landlords and tenants adjust to evolving regulations and market conditions. As mortgage rates stabilise, some signs of recovery in the housing market have been observed, with an uptick in new property listings and increased sales activity. Rightmove reported a 0.8% rise in average property prices this month, hinting at renewed confidence among buyers.
