Rental growth hits seven year low

Annual rental growth is at a seven year low after being pulled down by falling rents in London, the South West and Scotland.

The Countrywide Monthly Lettings Index found that rents increased by 1.6% in the year to December 2016, half the rate of 2015 (3.1%)

Increases were the highest in the East of England (8.1%), the South East (7.3%) and the Midlands (6.2%), while the biggest falls were in Central London (-9.4%), Scotland (-3.1%) and the South West (-3.1%).

Johnny Morris, research director at Countrywide, said: “As the number of homes available to rent has grown landlords have had to work harder to attract tenants.

“The average time to let spiked in April and has remained resolutely high ever since. Landlords are increasingly tempting sitting tenants to renew contracts with the promise of unchanged or even lower rents.”

But he added: “Rental growth will likely increase in 2017.

“Squeezed yields, fewer tax breaks and higher stamp duty rates are likely to deter landlords from expanding their portfolios.

“Fewer homes on the market will leave tenants with less choice and negotiating power.”
In 2016 the number of available rental properties increased by 12% from 2015, with London seeing 22% more homes to rent.

Last year a third (33%) of tenants who renewed their contract saw their rent go up, down from 37% in 2015.

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Written by: Houseladder