Rents across the UK continued to rise during May but at a decreasing rate, says HomeLet.
Data shows that rents agreed on new tenancies over the three months to the end of May were up by 4.4 per cent compared to the same period in 2015. That compares to an annual increase of 5.1 per cent in April 2016 and 7.6 per cent in May last year.
HomeLet says agents and landlords may have been expecting some impact from the increase in the supply of property in May after the rush to complete buy to let property purchases before the stamp duty surcharge hit on April 1 – but this has not yet happened.
The slowing of the pace of rent rises in May is broadly in line with a similar cooling in the rate at which house prices are rising – and may, HomeLet believes, be part of a broader story about economic uncertainty ahead of this month’s referendum on the EU.
Nevertheless, rents rose in 11 out of 12 regions in the quarter to the end of May.
In Scotland, rents are currently rising faster than anywhere else in the UK, with new tenancies costing 10.6 per cent more than in the same period a year ago.
However, the East Midlands, registering a rise of 8.3 per cent in rents compared to last year, is also showing strong gains.
London’s rental market, where the average rent on a new tenancy is now £1,563, up 6.2 per cent, also continues to see rents rise more quickly than in most other areas of the country.
“Looking beyond shorter-term factors, net population growth and the rising rate of employment remain the key demand-side drivers for residential property; they look set to continue to run ahead of public and private sector initiatives to increase supply and keep pace” says Martin Totty of Barbon Insurance Group, which operates HomeLet.
