Four bed UK properties saw the strongest annual rental growth in October (10.6%). That’s three times the growth rate of a one-bed home, which is up 3.7% year over year, according to Hamptons.
Last month, moving from a single to a twin cost £ 144 or 16% more per month, more than double the gap (£ 68 or 8%) in October 2018. This costs the average renter an additional £ 1,728 per year.
The costs of switching from a twin to a triple room have also increased. Last month a tenant would have had to pay £ 142 or 14% more every month to convert from a two to a three bed home, £ 30 more than in October 2020. This would cost the average renter an additional £ 1,705 each year.
Blend Network: Development finance shows no commitment to net zero yet
London is the most expensive region in the country to trade, both in absolute terms and as a percentage. Last month the average twin in the capital was £ 567, or 42% more per month than a single bed.
The northeast is the cheapest region to swap a single room for a twin room (+ £ 102 or + 20%). Compared to last year, the cost of trading-up has increased the most in the East Midlands.
Here it cost 12% or £ 63 more each month to swap a one-bed for a two-bed home than in October 2020. This is because rents for single-bed properties in the region are down 0.2% year-on-year, while the twin rooms increased by 9.7%.
Nationwide rental growth remained robust in October, with rents increasing 7.9% in the past 12 months, the fourth-strongest annual increase since the rental index began in 2013.
Outside the capital, rents continued to rise in double digits for the fifth month in a row, with average rents rising by 11.0% compared to the same period in the previous year. With 47% fewer rental apartments than at the same time in 2020, rental growth will remain buoyant through 2022.
Rents rose faster in the southwest than anywhere else in the country, by 15.3% annually. October marked the third month in a row that rents in the southwest (15.3%) grew faster than in any other region.
Meanwhile, annual rental growth in central London should turn positive after 21 consecutive months of downturns. Inner London rents fell 0.1% in October, the smallest drop since the pandemic began.
Even so, rents here remain 20% below their level on the eve of the pandemic, compared to a low of 30% at the beginning of the year. In cash, that 20% decrease means the average Inner London property costs £ 530 less than during peak season.
Aneisha Beveridge, director of research at Hamptons, said: “The desire for space was the real estate trend of the pandemic. While smaller
Urban real estate has gone out of fashion, and larger single-family homes are in high demand.
“But since the rents for larger houses are currently rising twice as fast as for smaller properties, it is now more expensive than ever for tenants to swap.
“The pandemic was the first time that we saw such a large divergence in rental growth based on property size. Usually rental growth stays pretty steady regardless of the size of the house, but over the past year the gap between rental growth for smaller and larger properties has widened to around 5%.
“But as more and more tenants return to the city centers and many are looking for smaller properties, the gap is likely to narrow in the New Year.
“There is little evidence that year-end rental growth is slowing, which means rents outside of the capital are likely to hit £ 1,000 a month by the middle of next year if growth continues at current rates.
“At the same time, rents in London are recovering to their pre-pandemic dynamics, which will drive rental growth across the country.”