UK rents saw an average increase of 2.1 per cent during September, according to the latest index from HomeLet.
The latest increase continues the trend towards higher rents, with the average rent agreed on a new tenancy signed last month at £927 according to the September HomeLet Rental Index. This is up from £908 during the same month last year.
The increase noted during September reflects the higher rents agreed on tenancies across the UK, with the South East of England being the only region to record a negative rate of annual rental price inflation. Northern Ireland saw the highest levels of growth, with rental price inflation climbing to 4.3 per cent in September. This was followed by the West Midlands at 3.9 per cent and the East Midlands at 3.7 per cent.
HomeLet’s Chief Executive Officer, Martin Totty said: ‘While it is perhaps too early to conclude, this data signals the re-emergence of an upward trend in rents. It wouldn’t be surprising if landlords, seeing their own current and anticipated cost increases, seek to pass these costs on to tenants to preserve the returns from capital they have invested in residential property assets. Landlords are facing a deluge of higher costs from new regulation, taxation changes on buy-to-let mortgages and the prospect of a near-term rise in interest rates. There’s also the added uncertainty over the fall-out from the government’s intention to ban letting agents from charging up-front fees to tenants.’
He continued: ‘In a sector where demand for rental properties generally outstrips supply, most informed commentators suggest higher externally imposed costs on landlords will inevitably translate into higher rents to tenants. This may prove to be the start of that upward movement, especially if tenants are left competing for fewer rental properties because some landlords decide the returns from property investment are being eroded by factors beyond their control.’