Rail strike action slows rental growth in South
Monday 23 January 2017
Strike action has hit the BTL market by slowing the pace of rental growth in five out of six key areas in the South over the last six months, new research shows.
Landlords are either curbing rent increases or cutting rents to meet dwindling levels of demand, following the emergency timetable implemented by Southern Rail in July, data from buy-to-let lender Landbay’s Rental Index suggests.
John Goodall, CEO of Landbay, said: “Rental prices along the Southern network haven’t plummeted just yet, but these figures do suggest that it is beginning to have an impact on local property markets.
“While the strikes may have caused headaches for commuters across the network, the dwindling rents are a small positive for tenants. Whether the lower rental prices are worth the delays is a whole other story.
“The research demonstrates the influence of these unavoidable external factors on the rental market.
“Our recent report has already highlighted the positive impact on infrastructural developments like HS2 and Crossrail on the rental market, however this is pushing prices in the opposite direction.
“With disruption expected to continue, people will begin to re-evaluate the criteria when it comes to renting – whether that be distance from London or reliable transport links.”
Rents in Surrey were growing by 0.12 per cent in the first half of 2016, but fell by -0.02 per cent in H2.
In East Sussex, rental growth slowed from 0.26 per cent to 0.15 per cent, while West Sussex saw a slowing from 0.24 per cent to 0.19 per cent.
Kent (0.27 per cent to 0.19 per cent) and the town of Milton Keynes (0.34 per cent to 0.17 per cent) also saw cooling rental growth in the second half of the year.
The only area to see accelerating rental growth, a sign of strong tenant demand, was Brighton and Hove, which saw rents grow by 0.24 per cent in H1, rising to 0.26 per cent in H2.
Average rents across the whole South East grew by 0.21 per cent from January to June, but slowed to 0.13 per cent in July to December.
As a result the region dropped from seeing the second fastest rental growth over the last five years, to the seventh, with only the North East and London showing slower rental growth.
We want to add value to landlords with interesting news and views! Our Hub includes information and opinions on the housing market from a variety of expert sources – please just be aware it doesn’t always reflect Simple’s opinion, or the products and services we provide.