Britain’s average residential rent increased slightly in 2016 at 1.12%, latest data revealed, but growth is expected to rise in 2017.
Compared to 2015 where growth was at 2.34%, rental growth slowed this year with rents in London dropping by 0.31%, the national rent review by buy-to-let lender Landbay states.
Towards the end of 2016, the national average rent paid is at £1,188 per month, an increase of £132. Rents in London peaked in April at £1,894 before falling in May.
Whilst the downward spiral seemed to continue in London, the rest of England has seen a yearly rent increase of 2%.
The biggest annual rise happened in the East Midlands at 2.6%, followed by the North West at 2.03% and Yorkshire and Humberside at 1.67%. These three regions saw rent growing at their fastest pace in five years.
Chief executive office of Landbay, John Goodall, sees the reason for the slowdown in the regulatory, political and economic challenges having an effect on the buy-to-let sector.
“But the nation has not been equally affected. London has been something of a millstone for the rest of the UK, and tenants will no doubt be relieved that rental pressure has eased since the referendum, but the fall in rents is unlikely to last, and we expect the tide will turn in 2017,” he said.
He explained that tighter lending criteria for buy-to-let borrowers which are kicking in from next month and changes made to mortgage interest tax relief will significantly restrict the supply in rental accommodation in 2017.
Tenants will have little choice but to compete for what properties are on offer. As a result we expect rents to rise faster than the pace of inflation next year, with growth tripling to 3% by the end of 2017.”