The average rent in the UK, excluding Greater London, has risen by 5.1 per cent, reaching £764 per month, proving little change from March’s figure of 4.9 per cent. Average rent in London has reached a staggering £1,543, a growth of 7.7 per cent. This is the third month in a row of steady increase.
Coming mere weeks after the Government introduced a 3 per cent Stamp Duty surcharge on all residential property purchases made by someone not buying their main home. Fears that rents may stagnate as the plethora of properties purchased in time to beat the changes come onto the market have not been confirmed, however, with rental growth on the index remaining stable.
Scottish rents appear to be rising at the fastest pace in the UK, with tenancies costing an average of 11.4 per cent more than the same period a year earlier. The East-Midlands also performed well, with a rise of 7.9 per cent. The North West was the only UK region which saw lower rents on new tenancies in the three months to April, falling by 1 per cent. However, rents agreed on new tenancies in April alone were up 1.7 per cent month-on-month.
Barbon Insurance Group’s Chief Executive Officer, Martin Totty, said: ‘The April HomeLet Rental Index has been much anticipated given the potential impact of the Stamp Duty changes on the private rental market; for now, however, rental price growth in most areas of the country is unchanged from the trends observed over almost three years.
‘It may be that over the next several months, the trends observed in the rental market begin to reflect the signs of some slowdown in the rate of house price growth that we are now beginning to see and that will be something to watch closely. But more broadly, there has been very little to alter the fundamental relationship between demand and supply, especially in those parts of the country where demand-side pressure is greatest.
‘For now it’s business as usual, which may be better news for landlords than for tenants, though landlords will no doubt be feeling the squeeze too given the various taxation changes they now need to budget for. We will have to see whether landlords try to pass their higher costs on, whether buy-to-let property investment diminishes in popularity and whether tenants are able to afford further increases in rents.’