Asking rents will rise by 4% outside London this year, according to Rightmove.
Rents to Rise by 4% Outside London This Year, Claims Rightmove
Last year, the property portal reports that asking rents increased by 3% outside London, but dropped by 4.4% within the capital.
The highest growth in rental prices of the year was recorded in the northern regions of Yorkshire and the Humber and the North West. However, all regions outside London saw a rise.
In inner London, rents fell by 5.2%, while there was a smaller decline of 2.5% in outer London.
The Head of Lettings at Rightmove, Sam Mitchell, considers the future of the rental market: “This year will be one of caution for buy-to-let investors, due to tighter lending criteria and increased Stamp Duty.
“We definitely won’t see the spike in Q1 purchases that we saw last year, as landlords rushed to buy before last April’s new Stamp Duty deadline.”
He also assesses how further changes will affect the sector: “If the tax changes being phased in from this April lead to even fewer buy-to-let purchases and some landlords deciding to sell, then a tightening of supply in some areas will lead to increasing rents.
“We forecast that asking rents could rise by 4% outside London by the end of 2017, though in London, prices are likely to stay flat.”
Mitchell advises landlords on the best locations to invest: “Investors looking for the strongest yields could consider investing in certain areas in the North West, where both demand and yields are high.
“Those with a number of properties in the capital may find that tenants are more price sensitive, so setting realistic rent levels will be the key to avoiding void periods.
“In order to mitigate this, we would recommend landlords asking for longer tenancies to help secure a steady rental income over the next few years while they adjust to what the tax changes will mean for them.”
While recent reports claim that rental yields are expected to drop below the five-year average this year, landlords should be aware that strong returns are still possible in some locations.