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The top 10 most expensive places to rent

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Christina Jordan examines 10 places where rent has gone through the roof, 10 places where rents are falling the most, and the top 15 buy-to-let mortgage deals.


Somebody needs to tell the rental market that Britain is only just on the road to recovery and that growth is supposed to be slow and sustained.

Because in some parts of the country, the private rented sector is enjoying a mini boom, with rental income being boosted by over 11% in the last year alone.

That’s according to flatsharing website spareroom.co.uk, which says that room rental costs, and their movement in the last 12 months, vary drastically depending on where you live.

Those flatsharing in Sunderland will have been thrilled to have seen average monthly house and flatsharing rents drop by a massive 13.5% in the last year, for example. While private renters in Stroke are not so lucky, having faced rent hikes of 11.3% in the last year.

The runners and riders

Second only to Stoke in the rising rents league is Telford in Shropshire, where room rents increased by 10.8% in the last 12 months.

Below are the 10 towns and cities to have seen the largest rises, noting the current monthly rent compared to last year’s figure.

Sharp rises

Location

Monthly rent Q1 2009

Monthly rent Q1 2010 

   Annual change 

Stoke-on-Trent

£307.67

£342.33

11.3%

Telford

£320.67

£355.33

10.8%

Oldham               

£307.67

£338.00

9.9%

Belfast

£268.67

£294.67

9.7%

Hull

£320.67

£351.00

9.5%

Blackpool

£329.33

£351.00

6.6%

Darlington

£329.33

£346.67

5.3%

Glasgow

£342.33

£359.67

5.1%

Ipswich

£346.67

£364.00

5.0%

Blackburn

£320.67

£333.67

4.1%

Source: spareroom.co.uk

What’s interesting about this list is that half of the top 10 towns are in the North of England, where average monthly room rents increased by 1.5% over the past 12 months. And there are no towns or cities from the south of England - average monthly room rents in the region rose by just 0.6% in the past year.

So rents are rising fastest in the North right?

Well, what is even more interesting is that when you look at the 10 towns and cities to have seen the biggest falls in monthly room rents, that table is also dominated by the North. If anything the North is seeing more volatility in rents, while rental income is more stable in many parts of the South.

Falling fast

Location

Monthly rent Q1 2009

Monthly rent Q1 2010 

Annual change 

Sunderland

£385.67

£333.67

-13.5%

Harrogate

£411.67

£377.00

-8.4%

Perth

£368.33

£342.33

-7.1%

Newport

£346.67

£325.00

-6.3%

Wigan

£329.33

£312.00

-5.3%

Doncaster

£333.67

£316.33

-5.2%

Preston

£346.67

£320.67

-5.0%

Crewe

£368.33

£351.00

-4.7%

Wakefield

£325.00

£312.00

-4.0%

Liverpool

£333.67

£320.67

-3.9%

Source: spareroom.co.uk

Time to let?

If you have a spare room in your house the figures above may well tempt you to consider taking in a lodger. Indeed the money you bring in can go a long way towards paying your mortgage.

Recent question on this topic

Plus, under the Government’s Rent a Room scheme you are able to earn £4,250 a year tax-free. That amounts to an average monthly rent of around £355, so if you are pulling in more than that, which is very likely in London and the South East for example, you’ll need to look into your tax obligations.

Of course, you also need to think about the general implications of having a lodger – it might increase your gas and utility bills, and it will certainly mean you have less space and privacy in your home. Of course, you must consider your own security if you live alone.

Let the lot

Some people choose to let out their whole property on a temporary basis. There are many people this suits, from those who need to move with work but intend to return to the property after a year or two, to people who are moving in with a partner and don’t want to sell up, just in case it doesn’t work out!

In the current market it could also be because money is tight and your home happens to be in a desirable rental location. It might make financial sense to rent out your place and live somewhere cheaper if you need to get your finances back on track.

Doing this is not the same as buying-to-let if you are only planning to let your home as a temporary measure. Instead you need to ask your mortgage lender for a ‘consent to let’. Most will grant it, but they may charge you, and they may only let you have the consent for a year or two before insisting you move onto a specific buy-to-let deal. You can find out more about getting consent to let in Need to rent out your home? Tell your lender!

The whole hog

Of course you might want to rent your home out permanently because you are relocating, or maybe buying a new place with a partner.

Related goal

Become a buy-to-let landlord

How to pick the right property, get the right mortgage, take out the right insurance, choose the right letting agent and most importantly, unravel all that red tape!

You could ask your mortgage lender to change your current deal to a buy-to-let mortgage, but you will have to show that the expected rental income meets at least 125% of your mortgage payments (though the lender may be willing to switch you to an interest-only deal which would reduce your monthly commitment).

Expect administration charges and new arrangement fees, plus the process could take time.

Your lender does not have to agree to moving you to a buy-to-let mortgage and, if it doesn’t actually offer them, you might have to go elsewhere, which could take time and cost money.

Also bear in mind that you will need at least 25% equity in your home to get a buy-to-let mortgage and 40% to qualify for the cheapest deals. Below are some of the best currently available:

15 fantastic buy-to-let deals

Lender

Deal

Rate

Fee

Max LTV

Principality BS

2-year tracker

3.39% (Base + 2.89)

3.5%

60%

Principality BS

2-year tracker

3.89% (Base + 3.39)

2.5%

60%

Coventry BS

2-year tracker

4.35% (Base + 3.85)

£1,050

60%

Principality BS

2-year fix

4.59%

£999

60%

Leeds BS

3-year fixed

5.49%

£1,549

60%

Leeds BS

5-year fix

5.69%

£1,549

60%

Coventry BS

2-year fix

4.74%

£1050

60%

BM Solutions

2-year fix

5%

2.5%

60%

Principality

2-year tracker

4.09% (Base + 3.59)

£999

60%

Whiteaway Laidlaw Bank

2-year fix

4.69%

2.75%

70%

Whiteaway Laidlaw Bank

3-year fix

4.84%

2.75%

70%

Nottingham BS

3-year fix

5.19%

£1,495

70%

BM Solutions

2-year fix

5.20%

2.5%

70%

Whiteaway Laidlaw Bank

5-year fix

5.39%

2.5%

70%

NatWest

2-year tracker

4.99% (Base + 4.49)

£1,999

75%

Use lovemoney.com’s innovative new mortgage tool to find the best mortgage for you online

Get help from lovemoney.com

If you need help getting the best mortgage use our resources.

First, adopt this goal: Become a buy-to-let landlord 

Then, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

John Fitzsimons looks at the dos and don’ts of arranging a mortgage over the internet.

At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 4045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article. 

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term will revert to the lender's standard variable rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

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