The average price for renting a property in the UK amounted to £1,196 in November, down 0.01 per cent since 2012, according to Landbay’s National Rent Review.
The analysis showed that falling rents in London mostly bogged down the steady rental growth in other parts of the country. Rental rates in the capital city became cheaper as it fell 0.83 per cent to £1,870.94. Elsewhere in the country, tenants have paid an average of $759.
For landlords, the concept of rent recovery services like those offered by MS Webb & Co. will likely be more relevant since every penny counts, now that recent rates have broken a rather long growth streak. The National Rent Review based its findings from an estimated 100,000 rental listings on Zoopla and ONS, which date back to 2012.
Stricter property laws and smaller tax incentives have also plagued landlords in the last two years, aside from a higher buy-to-let stamp duty, according to Landbay CEO John Goodall. However, the Bank of England’s Term Funding Scheme (TFS) and low interest rates have allowed them to endure the challenges. Landbay’s rent review provides a glimmer of hope for landlords, as rents are not expected to remain low for long.
A slowdown in capital spending in commuter-centric parts in the eastern UK will lead to rental hikes in 2018, potentially outperforming other markets in terms of price growth. This may be good news for landlords, but Goodall said that interest rates have begun to increase and the TFS programme would be reaching its end in February 2018.
For this reason, he believes that sweeping changes should be imposed on home construction to increase supply of properties for sale. A building plan for purpose-built rental properties will be necessary as well, or else rental prices will continue to surge in the next several years.
British landlords need to brace themselves in what seems like an unpredictable year ahead for the rental market.