8th
Oct 2017
In spite of all of the legislation and tax changes levied upon the private rented sector, landlords will take some comfort from the steady increase of rents in August with a rise of 2.4% higher than the corresponding month in 2016.
A specialist insurance provider for landlords and letting agents latest rental index, shows that the UK's average rents are currently at the highest level of growth since November 2016.
The capital's average monthly 'residential' rent helped boost the rent inflation with a 2.5% growth. For the first time London broke the average monthly rental barrier of £1,600 as it currently stands at £1,609.
The South West of England was the best performing region/area of England where its average rental inflation was 3.9% higher than in August 2016.
Northern Ireland also performed well with a strong growth of average rent up 3.7% against the same month (August) last year.
Overall growth across England has been achieved in eleven out of the twelve areas.
Chief Executive Officer, Martin Totty commented: "Whilst we’ve often observed a seasonal uplift in average rents at this time of year, there’s evidence of a trend now emerging which points to a reversal of the declines seen over the early part of this year. This will be welcome relief to Landlords who have been battered by the perfect storm of tax changes and post-Brexit uncertainties. Whether the trend continues or represents only temporary relief from the headwinds faced by property owners, the remaining months of 2017 should provide the answer.’
He added: "Whether the recent strengthening in rents achieved, seen generally across all regions of the country, is driven by more robust demand or by some restriction of supply is hard to judge. Either way, landlords will only be encouraged to invest in property over other assets if they’re convinced they can achieve reasonable returns. If not, then the supply of rental properties could become constrained. Many landlords still face further increases in their costs and so will need to find a new equilibrium between their legitimate required returns and affordability for tenants. It seems the elements in solving that particular equation become ever more complex."
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