Marijana No Comments

Rents rise as buy-to-let clampdown begins to hit landlord pockets

Landlords are raising rents after being hit by the buy-to-let clampdown in their tax bills.

ONS data shows rents rose 0.9% in the 12 months to May 2019, the highest annual growth since September 2017.

Across the UK, tenants saw rents rise 1.3% annually in May, up from 1.2% a month before.

Northern Ireland had the highest annual growth rate at 2.1%.

In England, private rental prices grew by 1.3% in the 12 months to May 2019, up from 1.2% in April 2019.

Rents grew by 1.1% annually in Wales, unchanged since February 2019, and Scotland saw a 0.8% increase, up from 0.7% previously.

Commenting on the figures, Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “After filing their 2017-18 tax returns, landlords are becoming more aware that ongoing changes to mortgage interest tax relief are increasing the financial challenges facing them.

“This is leading more property investors to reconsider their options and the pressure on some to increase rental prices will be mounting. We do not see it as a coincidence that several rental indices show that, following a protracted period of softness, average rents in London are once again increasing.

“Despite the current political and economic uncertainty, we hope a change in leadership will be seen as an opportunity for the Government to demonstrate its support for landlords, which goes hand-in-hand with helping people get on the property ladder.

“Growing pressure on landlords to increase rents in order to make ends meet will ultimately have a detrimental effect on renters’ ability to save for deposits to buy their own homes.

“The Government should be careful to ensure that any future regulation around the private rental market does not further shrink the appetite of private landlords to satisfy the growing demand of tenants.”

By MARC SHOFFMAN

Source: Property Industry Eye