Landlords relax as rents rise after tax increase

Posted on Saturday, May 7, 2016

New data from HomeLet has revealed that fears over higher Stamp Duty charges on purchasing BTL rental property might weaken the market have so far proved unfounded.

HomeLet’s figures show that rents agreed on new tenancies across the UK over the three months to the end of April have continued to grow at remarkably consistent rate.

The April HomeLet Rental Index reveals that rents on new tenancies signed on a UK rental property outside of London over the three months to April 2016 were, on average, 5.1% higher than in the same period of last year. That was barely changed from March’s figure of 4.9%, with rent rises having remained in a very narrow band since the beginning of the year.

In the capital, meanwhile, rents on new tenancies signed over the three months to the end of April were 7.7% higher than a year ago, the third successive month that London has registered this rate of increase.

The latest figures show that rents in Scotland are currently rising faster than anywhere else in the UK, with new tenancies costing 11.4% more than in the same period a year ago. However, the East Midlands, registering a rise of 7.9% in rents compared to last year, is hot on Scotland’s heels – the area, currently revelling in the success of Premier League football champions Leicester City, also tops the table of English regions by rental inflation.

London’s rental market, where the average rent on a new tenancy is now £1,543, also continues to see rents rise more quickly than in most other areas of the country. The 2.6 percentage point gap between rent rises on new tenancies in London and the rest of the UK, where rents average £764, is barely changed on last month (2.8 percentage points).

Just one area of the country, the North West of England, saw lower rents on new tenancies over the three months to March – as was the case in last month’s index. However, the speed at which rents are falling in the region continues to slow, to an annual rate of just 1% over the three months to April, compared to 3.5% over the three months to March. Rents agreed on new tenancies in April alone were 1.7% higher than in March

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