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Warning - landlords will quit as rent stagnation squeezes profits

More landlords will leave the private rented sector in the next year as annual rental price growth has been flat or falling since 2016 according to a property management firm. 

DJ Alexander, one of the UK’s largest family run property management companies, says that over the last year the average private rental price has increased by a mere 0.9 per cent across Britain - meaning that in many regions it was even less.

In England annual rental price growth has been below 2.0 per cent since May 2017 and below 1.0 per cent in the last four months - that’s down two thirds on six years ago. 


In Scotland annual rental price growth was last above 2.0 per cent in June 2015 and has fallen steadily, even going into negative territory four times since then. 

Wales has performed slightly better although has never enjoyed 2.0 per cent annual rental price growth and has now dipped to 0.7 per cent.

Over a five-year period, London has seen annual rent rates fall from 3.3 per cent in October 2013 to a fall of 0.2 per cent in October this year.

Other areas have performed better - the East Midlands has seen annual price rises increase from 0.8 per cent to 2.7 per cent over the same period, while the West Midlands, Yorkshire and Humber, the East of England and the South West have all experienced quite substantial increases in their annual rental price percentages.

“These figures highlight the tightening private rented market where margins are being squeezed and the casual landlord will be feeling the pinch. Many areas have almost static or barely rising annual price increases which, coupled with recent legislative changes which make it more expensive to be a landlord means that many will be pushed towards exiting the market” says David Alexander, managing director of DJ Alexander Ltd.

“The tax changes introduced by George Osborne continue to reduce the offsets which make running a property more expensive while Chancellor Hammond has reduced capital gains tax on selling rented property which makes the exit from the market more expensive” he continues.

“With the number of negatives increasing some landlords, many of whom only accidentally entered the market in the first place, may decide that now is the time to leave. Although there probably won’t be many tears shed for private sector landlords leaving the market, they play an essential part in providing vital housing stock across the UK.”


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