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According to the latest issue of Rent Check from Allsop, annual rent rises over the last five years have remained in line with the Retail Price Index (RPI) in England and Wales.
The rental market barometer for England and Wales analysed rent rises during five years to March 2018 across different regions and property types. It found that of 54 combined data points, 32 lay below RPI and 22 above demonstrating that rent increases were closely tied to the rate of inflation.
It was found that rent levels have also been mediated by a large number of landlords letting properties below the market rate to keep tenants. 59 per cent of landlords surveyed claimed that they were letting at least one property at below market levels.
It was also found that 85 per cent of landlords surveyed are currently making a profit, a figure which has remained stable since early 2017.
However, the main factor contributing to stabilising rent levels has been good PRS supply which has remained tied with growing demand for buy to let properties. However, the recent range of PRA changes and the newly proposed three year minimum tenancies could have a detrimental effect on future supply.
Partner at Allsop, Paul Winstanley, said: ‘Shattering the myth of rent rises greatly outstripping inflation, research has revealed rents have in fact risen moderately at a rate close to RPI over the last five years. Landlords have also been prepared to accept lower rents for good tenants. This, and past commitment by landlords to invest in the supply of buy to let property, have helped keep rent rises sustainable. Although most landlords are committed to the sector and are not likely to sell-up and leave anytime soon, government policy is likely to make life difficult for them in the longer-term. This risks the supply of much needed housing, which can’t be met by the build to rent sector and home ownership alone.’