Taylor Scott International News
Rents continue to rise in many parts of the UK with Greater London, the East Midlands and Scotland seeing the fastest rent rises in the first quarter of 2016. The figures from the latest HomeLet index also show that overall the average rent in the UK, excluding Greater London, is now £755 per month, some 4.9% higher than a year ago. It also shows that the average rent in London is not £1,536, up 7.7% year on year and the North West is the only area to see a quarterly decline. The figures are published as the private rental sector is anticipating the impact of tax changes and new regulations coming into force, and HomeLet said it has been the busiest ever month for landlord insurance. HomeLet’s research shows that rents continue to rise significantly ahead of inflation, with demand for property remaining strong. However, this comes ahead of reforms that are predicted to have a major impact within the sector, including a stamp duty increase for landlords buying new properties to let, new rules from regulators on buy to let lending and limiting tax relief on mortgage interest payments to the basic rate. HomeLet’s own data already shows evidence of landlords taking action ahead of the stamp duty changes. In March it saw a marked increase in enquiries from property investors, with 37% of insurance policies being purchased by landlords with new properties compared to just 24 per cent in the same period last year. This fits with recent data from the Council of Mortgage Lenders showing a spike in buy to let lending ahead of the stamp duty increase. London’s rental market, where the average rent on a new tenancy is now £1,536, continues to see rents rise more quickly than in other areas of the country. At 2.8 percentage points, the gap between rent rises on new tenancies in London and the rest of the UK, where rents average £755, was almost identical to last month at 2.9 percentage points. Just one area of the country, the North West of England, saw lower rents on new tenancies over the three months to March, with the HomeLet Rental Index recording a fall of 3.5% over the year. ‘We’ve continued to see increases in rents on new tenancies in almost every part of the UK during the first quarter, as the private rental market has responded to the pressures of an imbalance between demand and supply,’ said Martin Totty, Barbon Insurance Group’s chief executive officer. ‘However, external factors may now come into play: the stamp duty increase has already had an impact and that surge in the acquisition of property by landlords could now cause a short term increase in the supply of rental property in some areas of the country,’ he pointed out. ‘In the longer term, changes to rules around buy to let mortgage interest being offset against tax bills, coupled with the… Taylor Scott International
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