Rents are rising across the UK thanks to a lack of supply, according to the latest Rental Price Tracker from Rightmove.
London rents are the biggest movers with an annual increase of 5.3% and a quarterly increase of 2.1%. This means that rents in the capital are now at an all-time high and have surpassed the previous peak values reached in Q1 2016. In addition, the rate at which rents are increasing is the highest since Q1 2015.
These new figures from Rightmove back up previous data from Knight Frank which shows how the London rental market has weathered the storm and is now recovering.
But it is not just London where rents are going up annually – the trend is consistent across the country.
Rightmove analysis shows that outside London there are 10% fewer available rental properties marked as available to rent compared to the previous year. The best performing areas include the East Midlands (4%), Yorkshire and the Humber (3.6%), the South West (2.9%) and the North West (2.8%). Furthermore, Rightmove anticipates that rents will rise a further 4% in London and 3% outside London over 2019.
Rightmove’s Commercial Director and Housing Market Analyst Miles Shipside comments: “The increasing rents in London reflect that demand has been exceeding supply over the past year. When the Government introduced higher stamp duty on second home purchases back in 2016, it deterred many landlords from investing in the buy-to-let market, which in turn has exacerbated this ongoing dearth of available properties, and we’re yet to see any significant boost in stock from the many build-to-rent programmes. In addition, the more punitive treatment of tax reliefs has meant some landlords are also exiting.”
Shipside continues: “We forecast that average asking rents will continue to slowly strengthen further in 2019, by perhaps 3% outside London. In the capital there are no signs of an increase in buy-to-let activity, which may lead to asking rents growing further by around 4%. A mutually beneficial plan for both buy to let landlords and tenants is to strike up a genuine rapport. It eases landlords’ concerns if they have a tenant in situ for several years, while a tenant with a good relationship with their landlord will stand a better chance of negotiating more favourable rents.”
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