Rents continue to rise, though with a slight reduction in the growth rate experienced over the last couple of years.
Rental data from the June HomeLet Rental Index shows that in June this year the average UK private rent stood at £773 per calendar month, which is up by 3.5% from the previous year. In London, where rents are now averaging £1,575, landlords saw a 3.9% increase.
These latest figures compare with a UK average of 4.4% in May last year, while London stood at 6.2% in the same month in 2015.
Landlords are continuing to see steady rises in average rents, albeit with a slight slowdown in growth year-on-year.
Chief executive officer at HomeLet, Martin Totty, said the industry continues to be steady despite the sweeping changes like soaring stamp duty, cuts planned for mortgage tax relief and now the uncertainty caused by the decision to leave the European Union.
“The June HomeLet Rental Index shows that the rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently.
“Landlords are continuing to secure rental growth whilst there are some early signs of affordability criteria beginning to bear on the rates of rental price growth.”
Totty forecasts that the referendum result could have a knock-on effect in the coming months to the housing market, though he feels that rents will continue to rise.
“The result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked, all the more so if more people decide to rent while waiting to see what happens to house prices.
“With long-term drivers such as net population growth still in place, it is likely that rents will continue to rise, though affordability will continue to be crucial.”
Any downturn in the economy following Brexit could result in layoffs and rising unemployment, which for landlords would have the effect of increasing rent arrears and evictions.
Rents continue to rise… https://t.co/WDRfjBoviZ
— LandlordZONE (@LandlordZONE) July 20, 2016