Buy-to-let property enquiries from new investors and landlords have risen by 30% since May, according to the Rightmove Rental Trends Tracker Index.
March and April saw a temporary lull in buy-to-let activity on Rightmove, following the rush in the first three months of the year to complete before changes to stamp duty occurred.
Newly-marketed rental properties were up 6% in Q3 compared to 2015, with London seeing a year-on-year increase of 15% over the same period.
Sam Mitchell, head of lettings at Rightmove, said: “Investor activity has bounced back following the stamp duty changes, though some agents report that many investors are looking to knock sellers down on their asking prices to make up for the additional stamp duty they now need to pay.
“New rental supply has held up despite concerns that the stamp duty changes would lead to less fresh stock.”
Asking rents have risen by 0.5% to £779 per month this quarter. While the East of England still leads the way for the highest increase annually, it’s the North West that has risen most this quarter, up 2.0%, followed by Scotland, up 1.5%.
The top 10 locations outside London reveals a number of seaside towns are offering strong total returns, including Southend-on-Sea (14.7%), St Leonards-on-Sea (13.7%), Clacton-on-Sea (12.4%) and Westcliff-on-Sea (11.8%).
Mitchell added: “Once again Essex and other commuter spots are offering investors the best total returns, and those looking at long-term investments are seeking out areas with upcoming improved transport links.
“The changes starting in 2017 to lessen mortgage interest tax relief may see some seriously review their businesses and could scale back, though there appear to be no signs yet of landlords exiting the market.
“If supply of property to rent does scale back those that will win in the long term will be less highly-mortgaged landlords that chose not to sell off their property, and the big winners could be those that are investing in the right areas now.
“We expect some of the supply gap to be filled by Build to Rent but it could take some years for this to seriously increase rental stock levels. With this in mind 2017 could be another year of increasing rents.”