The latest rental analysis from Landbay reveals that the speed at which rents are growing in the UK have more than halved since the additional 3% stamp duty surcharge came into play in April 2016.
Data from the report indicates that annual UK rental growth slowed to 0.90% in March 2017- less than half of the 2.27% seen at the same period last year. Outside of the capital, the pace of rental growth has slowed by more than a quarter since the stamp duty hike, from 2.43% in March 2016, to 1.78% in March this year.
At the end of April 2016, the pace of rental growth had fallen to 2.17% across the UK and to 2.40% outside of London.
In addition, the average rent paid in the UK now stands at £1,191. Rents average £1,880 in London and £752 outside of the capital.
Albeit at a slower pace, rents are rising across the UK. In London however, the typical rent paid slipped for the eleventh straight month in March. Falls totalled -0.70%, which was almost four times less than the pace of rental inflation seen in March last year, at 1.96%.
In London, average rents in the boroughs of Kensington & Chelsea, Westminster and Camden saw the largest year-on-year falls in rents, of -3.65%, -2.64% and -1.49% respectively.
Across the rest of the UK, despite rent rises, the pace of these increases slowed to only 0.11% in March. Rents in England (with the exception of London) have seen the largest growth over the last year at 1.86%. This was followed by Wales (1.41%), Scotland (1.25%) and Northern Ireland (0.07%.)
Paul Brett, Managing Director of Intermediaries at Landbay, observed: ‘The last 12 months have been tough for the private rented sector, a period marked by the stamp duty surcharge last April, followed by changes to mortgage interest tax relief, tighter underwriting criteria and the pending ban on letting agent fees.’
‘While the figures suggest that the government has had some success in its efforts to rebalance through the interventions outlined above, policy makers should be wary of imposing any further regulation. The private rented sector is a crucial part of the housing mix and needs to be supported by landlords, tenants, housebuilders, lenders and the government alike. Playing the blame game will simply deter further investment and set the housing market off course for good. What is now needed are positive measures aimed at encouraging the development of high quality rented properties, a step change outlined in the recent Housing White Paper,’ he continued.
Concluding, Mr Brett noted: ‘Intermediaries need to be confident in advising their clients on how to navigate what can appear from the outside a complex sector, but the flexibility and growing popularity of buy-to-let means the subject will become a more regular topic of conversation for brokers nationwide.’