In a boost for UK landlords, buy to let rents continued to rise in August, up by 2.4 per cent from the same corresponding month last year.
The latest HomeLet rental index revealed that average rents across the UK showed the highest level of annual rent inflation since November 2016, reaching an average monthly rent of £939. This compares to £916 per calendar month in August 2016.
Average buy to let rents in London contributed to the boost in rent inflation, with the rate of annual rental growth in the capital up 2.5 per cent. This meant that average monthly rents in London exceeded £1600 for the first time, now standing at £1609 per calendar month.
Top performing area in the UK for buy to let rents was the South West of England, where annual rental inflation was seen to be up by 3.9 per cent when compared with August 2016.
Northern Ireland also showed strong growth, with average rents rising by 3.7 per cent when compared to the corresponding month the previous year.
In fact nationally, 11 out of 12 areas showed positive rental growth, with only the South East of England showing a decline of 0.2 per cent from the previous year figures.
HomeLet Chief Executive Officer, Martin Totty commented: ‘Whilst we’ve often observed a seasonal uplift in average rents at this time of year, there’s evidence of a trend now emerging which points to a reversal of the declines seen over the early part of this year. This will be welcome relief to Landlords who have been battered by the perfect storm of tax changes and post-Brexit uncertainties. Whether the trend continues or represents only temporary relief from the headwinds faced by property owners, the remaining months of 2017 should provide the answer.’
He continued: ‘Whether the recent strengthening in rents achieved, seen generally across all regions of the country, is driven by more robust demand or by some restriction of supply is hard to judge. Either way, landlords will only be encouraged to invest in property over other assets if they’re convinced they can achieve reasonable returns. If not, then the supply of rental properties could become constrained. Many landlords still face further increases in their costs and so will need to find a new equilibrium between their legitimate required returns and affordability for tenants. It seems the elements in solving that particular equation become ever more complex.’