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Rental prices have risen everywhere but London since Brexit

The UK’s decision to leave the European Union has had a well documented effect on the housing market, with most areas of the country seeing a stagnation or decrease in house prices. Rental prices, however, has experienced the opposite effect, with the latest data suggesting that most regions, apart from London, have seen rental price hikes.

Nottingham has seen the highest rent increases since 2016; prices in this city have soared by 24.5 per cent since then. The northern cities of Manchester and Newcastle are not far behind, with rents now 18.9 per cent and 17.7 per cent higher respectively. Bournemouth, Leicester, Leeds, and Bristol have all seen rental price hikes of between 12 and 15 per cent.

London hasn’t experienced anything like this level of rent increases since the referendum, with only the borough of Havering having seen rental prices grow by 10.5 per cent. Rents are still increasing in the capital, but at a much slower rate (about 5 per cent) than in the rest of the country.

Jonathan Senior, founder of VeriSmart, who compiled the data, comments, ‘While Brexit has brought subdued buyer demand, a fall in transactions and a top line slow in the rate of price growth, there are a number of areas in the rental market that have seen accelerated rental growth since the vote.

‘Although it is predicted that there will be a mass migration of EU nationals from the UK in the wake of our European exit, high house prices, low stock levels and a fairly stagnant level of wage growth means that even on a domestic level we are very reliant on the rental market to put a roof over our heads.

‘As a result, and even with the wider landscape considered, there are still plenty of opportunities out there for those looking to invest in bricks and mortar.’

BY ANNA COTTRELL

Source: Real Homes

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Letting agents warn tenants that period of slow rental growth is ending as supply falters

Letting agents and broker groups are warning tenants not to be fooled by current slow rental growth.

ARLA Propertymark has warned that rental property supply has hit a seven-month low as agents warn of more landlord exits and subsequent rent hikes.

Its Private Rented Sector (PRS) report found the supply of properties available to rent fell to 183 in November from 198 in October.

This is down 4% annually.

The warnings come despite the number of tenants experiencing rent increases falling for the third month running in November, with 21% of agents reporting that landlords increased rents, compared with 24% in October and 31% in September.

However, year-on-year the number of tenants experiencing rent rises is up from 16% in November 2017.

Agents also reported that demand from prospective tenants decreased in November, with the number of applicants registered per branch dropping to 55 on average, compared with 71 in October.

David Cox, chief executive of ARLA Propertymark, said: “It looks like tenants are starting to take control, with the number of landlords hiking rents falling for the third month in a row.

“However, as we look ahead to 2019, things don’t look as positive for tenants.

“Our members expect more landlords to be driven out of the market by rising costs, which will increase competition and push up rent costs. If we want to secure market stability in the new year, we need to increase stock, and making the market more attractive for buy-to-let investors is the only way this can be done.”

It comes as ONS data showed that annual rental growth in the UK remained at 0.9% for the fourth consecutive month during November.

In England, private rental prices grew by 1%, Wales experienced growth of 0.9%, while in Scotland rents increased by 0.5% in the 12 months to November 2018.

Rents in London were unchanged at 0.0%, but this was up from the 0.2% decrease in October 2018.

The UK annual growth figure was 1.4% when you exclude the capital.

Commenting on the data, Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said: “Rental prices continue to be subdued and below the rate of consumer price inflation across much of the UK. Unfortunately, this disguises the fact that not all is well in the private rented sector.

“Buy-to-let lenders continue to sharply reduce their new investment in rental property as more landlords withdraw from an increasingly unprofitable venture. This isn’t a new phenomenon.

“Our 2017 white paper, ‘Buy to Let: under pressure’, showed that the series of tax and regulatory changes imposed on the buy-to-let market were stunting rental property investment, and this trend has continued through 2018.

“We continue to raise concerns that this will eventually work its way through to higher rents for tenants, which will in turn make it still harder for those who are trying to save for deposits to buy their own homes.”

Source: Property Industry Eye

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Rental inflation remains steady despite buy-to-let tax clampdowns, says HomeLet

Rental prices on new tenancies increased by the equivalent of just £3 a month during the first quarter of 2018 with few signs of the mortgage interest relief changes hitting the market yet, HomeLet claims.

The tenant referencing and insurance provider’s latest rental index shows that overall rents on new tenancies during the first quarter of this year rose by 0.9% annually to £912, the equivalent of an extra £3 per month.

It comes as many commentators had warned that landlords would hike rents to offset the extra costs created by the rolling back of mortgage interest relief which started in the April 2017/2018 tax year.

Average new rents in London were £1,569, up by 1.5% on last year, and when the capital is taken out of the equation, rental price inflation across the UK was up just 0.1% annually,

New rents in Scotland showed the biggest annual increase, up 5.6% to £644 a month, while all but two regions – Wales and the north-east – saw a jump in prices.
Rents fell 3.2% annually in Wales to £596 a month, while the north-east saw a 2.5% dip to £509 a month.

Martin Totty, chief executive of HomeLet, said: “Rental price inflation was much more stable over the whole of 2017 compared to 2016, when rents rose at an annual rate of more than 4% in the first half of the year, before dropping back in the second half.

“So far, we are seeing this more stable market continue to prevail in 2018.

“The data also shows the sensitivity of the rental market to factors other than simply location. Last year, we saw rents in the areas surrounding the commuter belt to the south of the capital rise during a spate of rail strikes.

“The rate of growth has now slowed in this area as the strikes have ended. However, in the first quarter of 2018 rents in the central and eastern regions of London rose, which coincides with Crossrail nearing completion and suggests commutability into London has a real-time impact on the rental market.

“This data shows that a year into the three-year phasing-in of changes to buy-to-let landlord taxation, rental inflation so far has remained steady rather than increasing as some commentators had predicted.”

Source: Property Industry Eye