Rental prices on new tenancies increased by the equivalent of just £3 a month during the first quarter of 2018 with few signs of the mortgage interest relief changes hitting the market yet, HomeLet claims.
The tenant referencing and insurance provider’s latest rental index shows that overall rents on new tenancies during the first quarter of this year rose by 0.9% annually to £912, the equivalent of an extra £3 per month.
It comes as many commentators had warned that landlords would hike rents to offset the extra costs created by the rolling back of mortgage interest relief which started in the April 2017/2018 tax year.
Average new rents in London were £1,569, up by 1.5% on last year, and when the capital is taken out of the equation, rental price inflation across the UK was up just 0.1% annually,
New rents in Scotland showed the biggest annual increase, up 5.6% to £644 a month, while all but two regions – Wales and the north-east – saw a jump in prices.
Rents fell 3.2% annually in Wales to £596 a month, while the north-east saw a 2.5% dip to £509 a month.
Martin Totty, chief executive of HomeLet, said: “Rental price inflation was much more stable over the whole of 2017 compared to 2016, when rents rose at an annual rate of more than 4% in the first half of the year, before dropping back in the second half.
“So far, we are seeing this more stable market continue to prevail in 2018.
“The data also shows the sensitivity of the rental market to factors other than simply location. Last year, we saw rents in the areas surrounding the commuter belt to the south of the capital rise during a spate of rail strikes.
“The rate of growth has now slowed in this area as the strikes have ended. However, in the first quarter of 2018 rents in the central and eastern regions of London rose, which coincides with Crossrail nearing completion and suggests commutability into London has a real-time impact on the rental market.
“This data shows that a year into the three-year phasing-in of changes to buy-to-let landlord taxation, rental inflation so far has remained steady rather than increasing as some commentators had predicted.”
Source: Property Industry Eye