Industry news

Average residential rents reach a new monthly high in London

The average private rent in the UK increased by 1.3 per cent in the 12 months to July while in London they were up by 3.3 per cent, surpassing £1,600 a month for the first time. Nationwide the average rent is now £937

but when London is excluded it is £777, up by one per cent on last year, according to the index data from tenant referencing firm HomeLet. The region with the largest year on year

increase in rent was Northern Ireland with a 4.5 per cent increase in average rental prices, while month on month the biggest increase was 2.6 per cent in the South East. While nine of the regions identified by the

HomeLet Rental Index saw rents rise this month, Scotland, the North East and the East of England saw rents fall from June to July 2018. Rents were down month on month by 0.3

per cent in Scotland to an average of £651 but are still 3.3 per cent higher than July 2017. In the North East they fell by 0.8 per cent on a monthly basis to £525 and are 0.2 per cent down year on year while in the East of England they fell 0.7 per cent month on month to £909 and are down 1.1 per cent on an annual basis. Rents in Wales and the South West also fell

year on year by 0.3 per cent to £611 and by 0.6 per cent to £818. But in Wales they increased 1.3 per cent month on month and were up by 1.5 per cent month on month in the South West. The highest rent in London is now £2,307

in Westminster, followed by £2,213 in Camden and the City, while the lowest rent is £1,078 in Croydon, followed by £1,209 in Barking, Dagenham and Havering.

Supply shortage could push rents up 15 per cent

Institution of Chartered Surveyors. It said small-scale landlords are pulling out of the


market, largely because of tax changes brought in last year which have made buy-to-let investments less profitable. RICS said its survey suggested that East Anglia and the South West of England were likely to see the sharpest growth in rents from now until 2023. RICS said it was time the Government looked

again at the way the private rented sector was regulated. It said its members have seen the supply of new rental property falling consistently for two years. The views were echoed by the Association of

Residential Letting Agents, who reported that BTL investors are being pushed out of the rentals market by increasing costs and continued regulatory changes, while new landlords are being deterred from entering it. Increased demand from tenants was pushing up competition and the rents being charged. David Cox, chief executive of ARLA said

“To put tenants back in the driving seat, we need more homes available to rent, and the only way this will be achieved is if the Government makes the market more attractive for BTL investors.”

The highest rent in London is now £2,307 in Westminster

REDUCED SUPPLY The majority of both RICS and ARLA members

22 | HMM September 2018 |

rivate sector rents could rise 15 per cent by 2023 as the supply of new rental properties dries up, according to a survey by the Royal

are seeing steady increases in the number of people looking to rent, although the numbers are levelling off. Simon Rubinsohn, RICS chief economist, said: "The risk... is that a reduced pipeline of supply will gradually feed through into higher rents." A Treasury spokesperson said the

reasoning behind the tax changes was to make more houses available to homebuyers. "We want to realise the dream of home ownership for a new generation, and that's why we introduced a cut to stamp duty for first time buyers, and have built 1.1m additional homes since 2010," the

spokesperson said. Changes to the buy-to-let tax regime brought

in last year mean that mortgage tax relief for landlords will be restricted to the basic rate of income tax by 2020. RICS said the full impact of the changes and increases in stamp duty have yet to be felt. Abdul Choudhury, RICS policy manager, said:

"Withdrawing tax breaks that small landlords relied on, placing an extra 3 per cent on second home stamp duty, and failing to stimulate the corporate build-to-rent market, has understandably [had an impact on] supply. "The Government must urgently look again at

the private rented sector as a whole, including ways to encourage good landlords. Ultimately, [the] Government must consider the impact of its policies, and if the wish is to move away from the private rented sector, it must provide a suitable alternative."

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