The average cost of renting a home is now rising across every UK region for the first time in almost two years.
The claim comes from specialist buy to let mortgage lender Landbay which says rents grew by an average of 0.07 per cent in January, marking what claims “is expected to be the start of a year of sustained rental growth for the UK.”
The average UK rent now stands at £1,198 per month, a 0.66 per cent increase on this time last year.
While rents in London (£1,876) remain around 2.5 times the rest of the UK (£760), this is still £16 a month shy of the £1,893 high set in May 2016.
Landbay claims London is no longer exerting such downward pressure on the national average. Rents in the capital edged up by 0.03 per cent in January, softening the year on year decline to -0.54 per cent.
While every region saw rising rents in January, the speed of rental growth has not been consistent across the UK.
The East Midlands experienced rental growth of 0.18 per cent in January alone, followed by the East of England (0.13 per cent). Meanwhile, rents in the North East paralleled the 0.03 per cent growth seen in London.
“With all the tax and regulatory changes landlords have shouldered over the past couple of years, an uplift in rents has been on the cards for a while, and is likely to continue” suggests John Goodall, Landbay chief executive.
“The Bank of England’s Term Funding Scheme comes to an end this month, pulling away one of the crutches that has allowed many mainstream lenders to keep mortgage rates so low. This, together with gradually rising interest rates, will eventually push up borrowing costs for banks, and consequently for landlords, who will have to pass some of these costs onto tenants in the form of higher rents” he adds.