Rents across the UK grew by a modest 1.12 per cent in 2016 according to buy to let lender Landbay - that’s lower than the 2.34 per cent recorded in 2015.
The firm - using data to the start of December - says UK-wide rents hit a record average of £1,188 per calendar month, up from £1,177 at the turn of the year; that’s an extra £11 per month, or £132 per year.
This national average is inflated by London, where rents hit a peak of £1,894 in April, before entering negative territory in May, the month before the EU referendum, and falling in every successive month to reach £1,883 by the end of November.
Rents in the UK excluding London rose 1.91 per cent over the year to reach £749 by the end of November. The East Midlands (up 2.6 per cent), North West (up 2.03 per cent), and Yorkshire and Humberside (up 1.67 per cent) have all seen rents grow at the fastest pace for at least five years.
“When you look at the raft of regulatory, political and economic challenges coming to bear on the buy to let sector in 2016, it’s clear to see why rental growth has slowed this year, but the nation has not been equally affected“ suggests John Goodall, CEO and co-founder of Landbay said:
“London has been something of a millstone for the rest of the UK, and tenants will no doubt be relieved that rental pressure has eased since the referendum, but the fall in rents is unlikely to last, and we expect the tide will turn in 2017” he says.
“A new stamp duty levy, tighter affordability controls from the Prudential Regulation Authority, and the removal of mortgage interest tax relief all look likely to restrict the supply of rental housing in 2017, and tenants will have little choice but to compete for what properties are on offer. As a result we expect rents to rise faster than the pace of inflation next year, with growth tripling to 3.0 per cent by the end of 2017.”