Are sky-high rents finally running out of steam?
10-15-2016
Rents across the country are slowing as landlords try to keep their properties affordable enough Credit: Getty
Isabelle Fraser
ental prices have slowed to their lowest annual growth rate this year, according to HomeLet, which provides insurance for landlords.
Tenants signing up to a new rental agreement now pay an average of £910 per month, which is up 3pc on last year.
By contrast, in March, the annual rate of growth of rents was 4.5pc.
On a monthly basis, average rents across the country fell in September by 0.8pc from August, as the market was flooded with newly marketed properties bought before stamp duty was hiked by 3pc for investors.
In the last 12 months, the north-east of England and Scotland are the only places where rents have not increased.
But HomeLet said that the slowing growth in rents suggested that they may be hitting a threshold of affordability.
Landlords will also be hit by new changes to the tax system to be phased in from 2017. This will remove their ability to deduct the cost of their mortgage interest from their rental income, effectively meaning they will be taxed on turnover, not profit.
Martin Totty, the chief executive of HomeLet, said that landlords were trying to keep rents within affordable levels.
He said: "Despite factors such as higher stamp duty on purchases for buy-to-let investors, and the tax changes coming in from April 2017, it would appear so far landlords have absorbed any actual or expected decreases in their yields, rather than pass this on through higher rents.”
The average monthly rent in London is £1,555, down 0.4pc in September. The cheapest rents in the country are in the north-east of England, where they average £530 per month.