The rental market in the UK has remained resilient in the face of economic and political uncertainty, according to a new report.
Online estate agents HomeLet Rental Index suggests that rents agreed on new tenancies in the UK outside of London in the first quarter of the year were up by 3.5% year-on-year.
In the capital however, rents were up by 3.9%.
Rents were revealed to have risen in ten out of the twelve UK regions.
During May, rents rose by 4.4% with the exception of London, where rents were up by 6.2%. However, in June 2015, rents rose at 7.8% and 10.1% in London.
Data from the report indicates that the private rental sector has adapted well to the needs of landlords and tenants alike in the opening six months of the year. Landlords, faced with increased Stamp Duty and a rush to beat April’s deadline saw a spike in supply of rental property after this date.
Moreover, tenant demand has stayed consistent, given spiralling house prices and tighter mortgage availability.
It is obvious that much of the outlook for the sector will demand heavily on the fall-out of the Brexit vote. Many onlookers expect the result to see demand increase, as would-be property buyers choose to wait and see how prices are impacted during the coming months.
Other economists feel that the result will act as a brake on the sector, exacerbating the imbalance between demand and supply.
With rents rising in ten of the twelve regions of the UK during the opening quarter of the year, landlords should remember the correct procedure on proposing any increases.
Martin Totty, Barbon Insurance Group’s Chief Executive Officer, said, ‘The June HomeLet Rental Index shows that the rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently. Landlords are continuing to secure rental growth whilst there are some early signs of affordability criteria beginning to bear on the rates of rental price growth’
‘The impact of the EU referendum vote will now play out over the months ahead: if, as expected, the result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked; all the more so if more people decide to rent while waiting to see what happens to house prices.’
‘Landlords will be considering their position carefully, particularly in the light of further taxation changes to come next year, which could reduce net yields; with long-term drivers such as net population growth still in place, it is likely that rents will continue to rise, though affordability will continue to be crucial. The recent slowdown in rental growth rates may suggest an affordability ceiling is being approached.’