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UK Rent Growth at Four Year Low

UK Rent

Figures reveal that the rental growth enjoyed by landlords across the UK is now at the slowest it has been for four years.

The findings from LandBay show that rents between January and November last year rose by just 1.1% – that’s less than half the increase of 2.3% seen over the same period the year before.
The buy to let lender says that the slowing pace of rental growth in the UK is now at its lowest level since 2013.

The move also underlined the government’s shift away from supporting home ownership.
The average rent now being paid to landlords is £1,188, that’s up from £1,177 at the beginning of 2017 which equates to an extra £11 per calendar month.

Landlords in London saw their rents fall

However, landlords in London saw their rents fall by 0.53% over the same period with the average rent being paid by tenants now at £1,882. That’s the lowest since September 2015.

LandBay’s chief executive, John Goodall, said the amount of accommodation for rent was boosted temporarily by investors looking to complete transactions before the stamp duty surcharge was brought in last year.

He added: “The government’s Housing White Paper has also demonstrated a shift from a policy in support of home ownership. We are also seeing long overdue recognition of the private rented sector’s role in the UK housing mix.”

Mr. Goodall pointed out that the social housing schemes that will be necessary to meet growing demand will need to be very large and will take a time to build.

Not having enough houses for rent to meet growing demand

He said the problem of not having enough houses for rent to meet growing demand ‘is not going to disappear quickly’.

The biggest falls in rent has been seen by landlords with properties in Chelsea and Kensington who saw a 3.5% drop, and for those in Westminster where rents fell by 2.2%.

However, demand for private rented property in outer London has risen with rents in Barking and Dagenham increasing by 2.88%, in Havering by 2.64% and in Redbridge by 2.08%.

There is also some good news in the LandBay report which provides evidence of a link between rental values and infrastructure projects.

Rents for areas that run along the HS2 high-speed railway route

For instance, the rents for areas that run along the HS2 high-speed railway route has seen significant increases since the project was confirmed five years ago.

LandBay point to substantial rental uplift in Birmingham Curzon Street of 23.7%, in Birmingham with 22.4% and also in Leeds with 15.3% while Sheffield saw a 15% increase and Manchester’s rents rose by 14.5%. These rent increases have outstripped the UK average of 8.8%.

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About S Thompson

Simon Thompson is Chairman of the Landlord Syndicate and CEO / Co Founder of Accommodation for Students Ltd.

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