New rents rise above inflation as more landlords quit and tenancy fees ban strikes home

New rents rose by an average of 3.5% over the course of last year – and by almost 4% if London is taken out of the equation.

The above-inflation rises come after some landlords left the market and partly in the wake of the tenancy fees ban, and once again highlight the issue of housing affordability.

According to referencing firm HomeLet, which tracks the market, the average new rent in the UK is now £953 per month, up by 3.5% on a year ago.

Without London, the average new agreed UK rent is now £793, up by 3.9% on a year ago.

Average new rents in London are now £1,630, up by 2.1% on this time last year.

Every single one of the 12 regions monitored by HomeLet show an increase in rental values, with seven showing an increase of over 5% and Wales showing a 9.7% rise.

HomeLet chief executive Martin Totty said: “It’s been an interesting year for the property market as a whole.

“Despite Brexit implications remaining unknown for most of 2019, the private rental sector has continued to conform to the basic economic principle of supply and demand and has only seen rises edging just beyond the rate of inflation until recent months.

“Rental price growth has been on an upward trajectory since mid-2017, driven primarily by an acceleration in the regions outside of London.

“It’s likely that there are several things contributing to the robust performance of rental prices, the first being the Tenant Fees Act introduction last June.

“This moved the burden of some fees from tenants to landlords in the first instance, but as most commentary reported at the time, it was very likely to find its way back to tenants over time through higher rents.

“At the same time, the last year has seen more and more reasons for private landlords to potentially exit the market, such as increased taxation and regulatory burdens.

“There has also been a constriction in the supply of private rental stock as some landlords have indeed left the market following this and other legislation changes that have negatively impacted their yields.”

He went on: “Looking forwards, more potential disincentives are on the horizon for landlords with the promise of a tightening legal regime around no-fault evictions.

“Should these changes lead to more landlords leaving the market as tenant demand continues to grow, this imbalance would see the rate of rental inflation rise quicker than last year.

“So long as the balance between supply and demand remains, it would be reasonable to predict a further period of solid rental price growth throughout this year.”

According to separate research, by insurance firm Simply Business, a quarter of landlords (26%) plan to sell at least one property this year. In a survey of 800 landlords, most (82%) will not buy another property this year, and just 13% are planning to make a further investment.

 

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4 Comments

  1. Will2

    S21 abolition will, almost certainly reduce supply of rentals available (thus driving rent increases) and even those who remain will take so so much more care in tenant selection to avoid the  bad tenants they could be stuck with.  Every cloud has a silver lining in that  it will certainly up the ante for landlords to become more professional, particularly with tenant selection.  For tenants? well rents will rise and those borderline tenants may well find more thorough referencing, more insistance on guarantors and a toughening up of the systems.  Government, and certain  so called housing charities will then be moaning more and pushing for rent control even harden.  The PRS is on a downward slope encouarged by so called housing chartities and myopic politicians and the current government.  A conservative government in love landlord bashing policies encouraged by the media who can’t resist an good emotional story despite the truth.

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  2. DASH94

    Who’d have thunk it?  (except almost everyone who actually  works in the industry?)

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  3. Woodentop

    The series “Nightmare Tenants and Slum Landlords” is also having a major downturn in confidence for landlords where it consistently portrays nightmare tenants trashing homes and to much hassle to get involved with and end up with meggar £k’s of lost rent and damage and the court system is inefficient.

     

    Clawbacks on landlords for dishonest housing benefit tenants is on the increase and what a farce Universal Credit implementation is.

     

    Loss of Section 21 will be the death nail and indications are we will loose between 10% to 20% of landlords in that event.

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  4. PossessionFriendUK39

    So-called Tenant support groups  pushing the Govt and of course the daft lot for listening are responsible for Tenants misery,  but there’s ‘ none so blind that cannot see,’   as they say.

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