Shortage of rental properties continues to push rents up

A continued shortage in the number of rental properties on the market is pushing rents upwards in England and Wales, according to a new report.

The most recent Your Move England & Wales Buy to Let Index, collated in partnership with Cebr, indicates that the average rent in these countries now stands at £874 pcm. This follows a 3.1% increase during the last year.

Annual Rises

Annually, the largest growth was recorded in Wales, where prices rose by 4.3% during the last 12 months. However, the country remains cheap to rent in, with average rental costs hitting £595pcm.

Following Wales, the next strongest growth was recorded in the South East of England, where the average property was let for £884pcm. This was a rise of 3.6% year-on-year. In the East of England, average rents now stand at £873pcm, following a yearly rise of 3.3%.

Rent increases in many regions can be attributed to a fall in housing stock available to tenants. This can be put down to the recent tax changes impacting on landlords.

Falls

The only region in England and Wales to experience year-on-year falls was the South West, where rents slipped by 2.2% to hit an average of £667pcm.

In addition, the data shows that rental yields in many areas have fallen during the last 12 months, from an average of 4.9% to 4.4%. Investors in the North East of England continue to enjoy the greatest returns, of 5.2% typically.

The table below shows a regional breakdown of how rents have changed per region during the last year:

Impact

Richard Waind, Director of Your Move, observed: ‘We are now starting to see the real impact of the government’s stamp duty revision, plus the additional tax changes which have hit landlords hard.’

‘The outcome has been a decline in the number of rental properties on the market and this has had the effect of pushing up prices for tenants.’

Concluding, Mr Waind said: ‘The Private Rental Sector could still be seen as an attractive opportunity for investors, with the North East and North West in particular seeing strong growth. Although buy-to-let investors are preparing for the new PRA changes coming into effect in September, it’s clear that there are still people who believe that, property remains a viable investment option.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/housing-shortage-drives-up-rents-in-england-and-wales

 

 

©2017 Just Landlords

Log in with your credentials

Forgot your details?