Landlords' pricing power is on the up again
Average asking rents in the North East soared by 3.3 per cent, year on year in the fourth quarter of 2017, new data from Rightmove’s rental trend tracker shows.
Farnham in Surrey recorded the highest rental growth outside London at 9 per cent in 2017, followed by Corby in Northamptonshire, up 8.2 per cent.
And in London, asking rents ended the year 1.2 per cent higher than at the end of 2016, the first time the annual rate in the capital has been in positive territory in nearly two years.
Rightmove director and housing market analyst Miles Shipside said: "Increasingly stretched tenant affordability, and the surge of buy-to-let property supply beating the stamp duty tax hike deadline, have acted together to mute landlord pricing power.
"In contrast, after a few years of falling rents in London they’re back on the up again, due to a combination of tightening stock available to rent and strong demand."
It is thought the figures have been affected by a surge in rental supply in 2016 from landlords who rushed to buy up properties to rent out before the additional stamp duty on second homes was introduced.
Now, as supply is tightening again, rents have started to increase.
Rightmove’s report also shows that the South East and Yorkshire and the Humber are the only two regions to end 2017 with asking rents down.
The national average rise of 0.7 per cent was well below previous years with rises of 3.7 per cent recorded in 2015 and 3 per cent in 2016.
Although the 2017/2018 tax year will see the start of the Government’s changes to tax relief on buy to let mortgages, Mr Shipside doubts the first phase will impact on many landlords’ portfolio decisions.
He said: "From speaking to some landlords they’re unlikely to make any decisions to sell up until they see in real time how much of an impact it has on their finances, with many choosing to take a wait and see view rather than looking at short-term gains or losses."