Average UK rental growth has halved in 2016 to 1.12% from 2.34% last year, the National Rent Review from buy-to-let lender Landbay has revealed.
Rents fell (-0.31%) in London, though the rest of England grew by 1.91%.
John Goodall, chief executive and co-founder of Landbay said: “When you look at the raft of regulatory, political and economic challenges coming to bear on the buy-to-let sector in 2016, it’s clear to see why rental growth has slowed this year, but the nation has not been equally affected.
“London has been something of a millstone for the rest of the UK, and tenants will no doubt be relieved that rental pressure has eased since the referendum, but the fall in rents is unlikely to last, and we expect the tide will turn in 2017.
“A new stamp duty levy, tighter affordability controls from the PRA, and the removal of mortgage interest tax relief all look likely to restrict the supply of rental housing in 2017, and tenants will have little choice but to compete for what properties are on offer. As a result we expect rents to rise faster than the pace of inflation next year, with growth tripling to 3% by the end of 2017.”