UK rents increased by 3.5% in the year to December 2019, and rents could see a steeper rise in 2020, HomeLet’s Rental Index has said.
London rents increased by 2.1%, though Wales and the North West saw the biggest increases, of 9.7% and 8.3% respectively.
Martin Totty, chief executive of HomeLet, said: “Looking forwards, more potential disincentives are on the horizon for landlords with the promise of a tightening legal regime around no-fault evictions.
“Should these changes lead to more landlords leaving the market as tenant demand continues to grow, this imbalance would see the rate of rental inflation rise quicker than the steady growth of 2019. So, private landlords have an interesting choice to make moving into the new decade.
“Whilst a level of macroeconomic uncertainty remains, it seems unlikely that the trend of recent years is set to change any time soon.
“So long as the balance between supply and demand remains, it would be reasonable to predict a further period of solid rental price growth throughout 2020.”
The South West and the West Midlands recorded the most modest rent increases, of 0.8% and 1.6% respectively.
The average rent in the UK is now £953, though when London is excluded it stands at £793.
Typical rents in London are now £1,630, followed by the South East and East of England, at £1,023 and £913 respectively.
Totty added: “It’s likely that there are several things contributing to the robust performance of rental prices, the first being the Tenant Fees Act introduction in June 2019.
“This moved the burden of some fees from tenants to landlords in the first instance, but as most commentary reported at the time, it was very likely to find its way back to tenants over time through higher rents.
“At the same time, the last year has seen more and more reasons for private landlords to potentially exit the market, such as increased taxation and regulatory burdens.
“There has also been a constriction in the supply of private rental stock as some landlords have indeed left the market following this and other legislation changes that have negatively impacted their yields.”