Rents continue to rise although growth is slowing

Saturday 16 July 2016

Landlords are continuing to get more for their money as rent prices continue to rise although growth is slowing, they are being warned.

Rental data from HomeLet shows in June this year that the average rent prices stood at £773 per calendar month which was up by 3.5% from the previous year.

In London, where rents are now at £1,575, landlords fared better with a 3.9% increase.

Despite it being good news for those in the buy-to-let market, the down side is that the annual growth has slowed.

In May 2016, the rate was at 4.4%, while London stood at 6.2%.

Chief executive officer at HomeLet, Martin Totty, says the industry continues to steady itself despite the sweeping changes like soaring stamp duty, cuts planned for mortgage tax relief and of course, the uncertainty caused by the decision to leave the European Union.

He said: "The June HomeLet Rental Index shows that the rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently.

"Landlords are continuing to secure rental growth whilst there are some early signs of affordability criteria beginning to bear on the rates of rental price growth."

He forecasts that the referendum result could now have a knock-on effect in the coming months to the housing market.

"The result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked, all the more so if more people decide to rent while waiting to see what happens to house prices."

Mr Totty is hopeful rents prices will still head in the right direction.

He added: "With long-term drivers such as net population growth still in place, it is likely that rents will continue to rise, though affordability will continue to be crucial."