The rental market received a boost in supply of 8% more new properties advertised to rent in Q2 compared with the same quarter in 2015.
The extra listings on Rightmove followed the Q1 rush to buy second properties before the Stamp Duty Land Tax surcharge kicked in.
Most of the new properties were in London, up by 22% on the same period last year, resulting in a small drop in the region’s average asking price to just under £2,000 per month.
Despite the increase in supply, all other regions recorded a rise in average asking rents this quarter, with the east of England’s 5% annual change leading the way.
Rental enquiries were up 2% in Q2 compared with the same period last year, and up 1% in the two weeks after the referendum compared to same two weeks in 2015, as the lettings market shows no immediate signs of Brexit impact.
Sam Mitchell, Rightmove’s head of lettings, said: “The big spike in March transactions resulting from a large number of investors beating the more punitive Stamp Duty tax deadline has created a rental supply boost which is good news for prospective tenants actively looking for a new place to live.
“Now that the Stamp Duty changes have come in, this boost may be short-lived, as landlords consider whether or not to make further purchases.
“Our own research among landlords shows that just under a third of them are concerned that the Stamp Duty changes, plus the forthcoming tax relief changes, will potentially wipe out their profits.
“Once the tax relief changes start to be phased in from next year, new buy-to-let activity could slow further.
“However, rental demand is still outstripping supply in many areas of the country so we may see a shift by investors to look in areas that offer better yields for long-term property investments.”
He suggested that investors planning to continue expanding their portfolio could look to some of the areas with highest demand from prospective tenants.
The top five places include three in Greater Manchester – Ashton-Under-Lyne, Stalybridge and Oldham – where average asking rents for two-bedroom properties are around £520 per month and you can buy a two-bedroom home for around £100,000.
Demand as measured by email and phone enquiries for rental properties from prospective tenants to agents on Rightmove was up 2% this quarter compared to Q2 in 2015, and up 1% year-on-year in the two weeks immediately following the referendum result.