Demand for rental properties is set to remain high during 2017, despite landlords preparing to raise rents in the face of increased financial pressure.
New research from Landbay has revealed that rents outside of London saw strong growth during 2016, and are set to remain robust into the coming year. New changes such as the government’s plan to phase out mortgage tax relief for landlords, increased stamp duty charges and a ban on letting agent fees mean that many landlords plan to raise rents to shoulder higher costs. However, Landbay reports that the housing shortage means that tenants will have little choice but to continue renting.
The research revealed rental payments account for over half (53 per cent) of the average take-home pay for those residing outside of the capital. The average rent for a UK property outside of London reached £750 per month in December 2016, up 2.04 per cent on the start of the year.
Average rents across all property sizes were up 2.13 per cent in England (excluding London) and 1.42 and 1.43 per cent in Scotland and Wales respectively in 2016.
CEO and founder of Landbay, John Goodall, said: ‘Demand for rented accommodation will remain robust, as the myriad threats of rising house prices, falling real incomes and rising inflation affect the ability of aspiring homeowners to get their foot on the housing ladder and save for a deposit. The government may have just committed £7 billion to building an additional 200,000 affordable starter homes, but supply across all tenures is still too low. The buy-to-let market has become a catch-all for a forgotten generation of house hunters, for those who cannot, or choose not to, buy a property outright.’