Buyer enquiries from potential landlords and investors are now up 30 per cent since May according to Rightmove, suggesting that the damage to demand caused by the stamp duty surcharge may be ebbing away.
The portal says March and April saw a temporary lull in buy to let activity, following the rush in the first three months of the year to complete before the new duty kicked in.
The brief pause in activity didn’t lead to a reduction in new rental supply that some were predicting, with newly-marketed rental properties up six per cent in the third quarter of the year compared to the same period of 2015.
London continues to lead the way for new supply, with a year-on-year increase of 15 per cent over the same period.
Asking rents are up slightly this quarter, rising 0.5 per cent to £779 per month. It’s the North West that has risen most this quarter, up 2.0 per cent, followed by Scotland up 1.5 per cent.
London continues its downwards trend, staying under £2,000 per month and annually down 1.5 per cent.
Rightmove has also looked at where last minute purchases before the stamp duty surcharge deadline are paying off most for investors.
The portal’s total returns calculation takes into account the area’s capital price growth since the stamp duty changes and the average rent a landlord would have collected in that time. This identifies the locations where buy to let investors have seen the highest overall return on their investment.
The top ten outside London are Southend-on-Sea (14.7 per cent), St Leonards-on-Sea (13.7 per cent), Clacton-on-Sea (12.4 per cent) and Westcliff-on-Sea (11.8 per cent). Corby and Wellingborough also make the top ten with total returns of 12.8 per cent and 11.8 per cent respectively.
Although yields are often lower in London, the increase in capital has led to total returns as high as 13.8 per cent in East Croydon and 13.4 per cent in Greenford.