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Rightmove forecasts rents outside of London will rise 4% in 2017

Asking rents rose 3.0 per cent outside of London in 2016 - but will rise 4.0 per cent in 2017.

That’s the forecast from Rightmove, which says that all regions except London recorded a rise in asking rents in 2016, with prices up annually by 3.0 per cent, just slightly lower than 2015’s rise of 3.7 per cent.  

Northern regions led the way as the year ended, with Yorkshire and the Humber up 4.5 per cent and the North West up 4.4 per cent, overtaking the East of England that had been the best performing region until the final quarter of 2016. 


In London, more available rental stock throughout the year led to a 4.4 per cent annual drop in rental prices across the capital. In Inner London rents fell by 5.2 per cent while there was a smaller drop of 2.5 per cent in Outer London.

The top five areas with the highest rental growth in 2016 were scattered across Britain, with Swansea at number one reporting an 11.4 per cent annual increase, followed by Gillingham in Kent with asking rents up 11.1 per cent. 

Bath, which comes in third with a 10.5 per cent increase to £1,148 per month, is the location that reported the highest annual growth for asking prices in 2016, up 17.8 per cent to £485,491.

“This year will be one of caution for buy to let investors due to tighter lending criteria and increased stamp duty. We definitely won’t see the spike in first quarter purchases that we saw last year as landlords rushed to buy before last April’s new stamp duty deadline” explains Rightmove’s head of lettings, Sam Mitchell. 

“If the tax changes being phased in from this April lead to even fewer buy to let purchases and some landlords deciding to sell, then a tightening of supply in some areas will lead to increasing rents. We forecast that asking rents could rise by 4.0 per cent outside London by the end of 2017, though in London prices are likely to stay flat.”

Rightmove suggests that those buy to let investors planning to expand their portfolio in 2017 and looking for the best yields could consider places in Merseyside and Lancashire where they could get yields of over 7.0 per cent if they buy property that would suit families or young professionals looking for long-term rental contracts.  

Bootle in Merseyside currently offers a yield of 9.3 per cent, Birkenhead is 7.5 per cent and in Lancashire Burnley’s yield is 7.2 per cent while Accrington is 7.1 per cent.

“Investors looking for the strongest yields could consider investing in certain areas in the north west of England where both demand and yields are high. Those with a number of properties in the capital may find that tenants are more price sensitive, so setting realistic rent levels will be the key to avoiding void periods. In order to mitigate this, we would recommend landlords asking for longer tenancies to help secure a steady rental income over the next few years while they adjust to what the tax changes will mean for them” says Mitchell.


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