New rents rise above inflation as more landlords quit and tenancy fees ban strikes home
New rents rose by an average of 3.5% over the course of last year – and by almost 4% if London is taken out of the equation. The above-inflation rises come after some landlords left the market and partly in the wake of the tenancy fees ban, and once again highlight the issue of housing affordability.
According to referencing firm Home-Let, which tracks the market, the average new rent in the UK is now £953 per month, up by 3.5% on a year ago. Without London, the average new agreed UK rent is now £793, up by 3.9% on a year ago.
Average new rents in London are now £1,630, up by 2.1% on this time last year.
Every single one of the 12 regions monitored by Home-Let shows an increase in rental values, with seven showing an increase of over 5% and Wales showing a 9.7% rise.
Home-Let chief executive Martin Totty said: “It’s been an interesting year for the property market as a whole. Despite Brexit implications remaining unknown for most of 2019, the private rental sector has continued to conform to the basic economic principle of supply and demand and has only seen rises edging just beyond the rate of inflation until recent months.”
“Rental price growth has been on an upward trajectory since mid-2017, driven primarily by an acceleration in the regions outside of London. It’s likely that there are several things contributing to the robust performance of rental prices, the first being the Tenant Fees Act introduction last June. This moved the burden of some fees from tenants to landlords in the first instance, but as most commentary reported at the time, it was very likely to find its way back to tenants over time through higher rents.”
“At the same time, the last year has seen more and more reasons for private landlords to potentially exit the market, such as increased taxation and regulatory burdens. There has also been a constriction in the supply of private rental stock as some landlords have indeed left the market following this and other legislation changes that have negatively impacted their yields.” He went on: “Looking forwards, more potential disincentives are on the horizon for landlords with the promise of a tightening legal regime around no-fault evictions. Should these changes lead to more landlords leaving the market as tenant demand continues to grow, this imbalance would see the rate of rental inflation rise quicker than last year.
“So long as the balance between supply and demand remains, it would be reasonable to predict a further period of solid rental price growth throughout this year.”