London Downturn Drives Buy To Let Rents Down
Rents for private homes across the country rose by 1.6% in the year to the end of September 2017 – the same as the previous month.
The average for England was 1.6%, but it was slightly less in Wales at 1.4%, while Scotland saw a slight increase of 0.3%.
Rents in London were up 0.9%, a slowdown from the 1.2% posted in August. The Office of National Statistics released the figures as the latest instalment of the Index of Private Housing Rental Prices for the year to September 30.
The index is an experimental statistical base that started in January 2011 in response to criticism that the government had no independent way to monitor private rents.
Since then, rents in the UK have risen by 15.2%, while excluding London, the index returns an increase of 11.3% over the same period.
“Growth in private rental prices paid by tenants across Britain has seen signs of a slowdown since the end of 2015, increasing by 1.6% in the 12 months to September 2017,” says the report.
“A property that was rented for £500 per month in September 2016, which saw its rent increase by the average rate would be rented for £508 in September 2017. This slowdown in the growth in private rental prices is driven mainly by a slowdown in London over the same period.”
Looking at buy-to-let rents in the regions, the most significant annual increase was 2.9% in the East Midlands.
The North East posted the lowest increase of 0.4%.
Excluding Scotland, Wales and London, rent increases were highest in the south and east and lower in the north.
Poor growth in Scotland is probably due to a trend of too much supply, and weaker demand, says the report.
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Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.