Rents outside of London have dropped by 0.2 per cent in the third quarter of this year according to new data from Rightmove.
This sharply bucks the traditional autumn trend and is fuelled by a particular fall in south east England of 2.3 per cent on the previous quarter. This is due to what Rightmove calls “steadily increasing supply since last year’s second home stamp duty changes.”
London asking rents are at their lowest at this time of year since 2013, although a drop in supply and increased demand could mean rental prices will start to rise again soon, the portal suggests.
Properties are taking eight per cent longer to find a tenant outside London and five per cent longer in London than at this time last year.
“Since last April’s second home stamp duty changes came in the supply of new rental properties in the south east has been steadily increasing, up 5.5% on this time last year” says Rightmove’s head of lettings Sam Mitchell.
“Agents are reporting that some investors looking for better yields are shifting their focus from London to instead buy in the surrounding counties of Surrey, Berkshire and Buckinghamshire. The increase in stock in the south east has led to softening in rents in some areas where there is less competition among tenants, but they are holding up in key commuter areas where tenant demand is strong” he continues.
Asking rents in London have continued their downward trend this month, and are now at their lowest at this time of year since 2013, at an average of £1,920.
New listings are down 3.7 per cent in London on Q3 last year, the only region in the south to see a drop in new supply.
“Last year the supply of rental properties in London increased as much as 26 per cent when investors rushed to buy ahead of the stamp duty changes, leading to cooling rents over the last 12 months in the capital. Now it appears that rental investors are starting to move their money away from London with a number of agents across London saying that investors are being replaced by first-time buyers” Mitchell continues.
“This is likely to constrict rental supply in the capital and lead to rents increasing again, so now would be a good time for prospective tenants to act, before this happens.”