Confirming many Covid-related trends, it appears that outer city properties have seen their yields and rents grow to a greater degree than city centre homes.
A study of London, Birmingham and Manchester by buy to let specialist Sequre Property Investment shows that on average across all three cities, the monthly cost of renting within an inner city area sits at £1,152 versus £908 per month in the outer city market – a difference of 27 per cent.
London is home to the biggest difference, with rents across the inner city rental market coming in 37 per cent higher on average, with a 26 per cent difference in Manchester and just a nine per cent difference in Birmingham.
However, when it comes to annual rental growth, the outer market across each city has fared far better than the inner city market.
On average across all three cities, annual rental growth across outer city areas has remained largely flat, while across inner city rental areas it has fallen by 4.4 per cent in the last 12 months.
Manchester has seen the strongest performance, with inner city rental values remaining largely unchanged in the last year while across the city’s outer rental market, values have climbed by 3.7 per cent.
In Birmingham, outer city rental values are up 2.2 per cent versus a marginal 0.3 per cent uplift across the inner city.
London’s rental market has struggled across the board, with just a 1.1 per cent increase in rental values across outer city areas and a sharp 7.8 per cent drop across the capital’s inner city areas.
Sequre sales director Daniel Jackson: “It’s clear inner city rental markets are still struggling due to the decline in demand caused by the pandemic, despite a gradual return to normality from a social standpoint and with regard to the workplace.
“This is particularly evident across the London market, where rental values have plummeted across inner city areas, while they’ve also struggled in outer city areas.
“The good news is that elsewhere, outer city rental values are on the up, with both Manchester and Birmingham seeing very healthy levels of growth. This suggests that tenants are now starting to make their return and this is a trend that should soon reach our city centres and help boost values across inner city rental markets.”