Rents rise by 2.6% in year to April
Rents paid by private sector tenants in Britain rose by 2.6% in the year to April 2016, according to data released by the Office of National Statistics.
This was unchanged when compared to year-on-year results to March.
Rental rises
Since January 2011, rental prices in England have risen more than those in Wales and Scotland. This particular trend continued into the last month, with data from the private housing rental index from the ONS showing that rents rose by:
- 8% in England
- 2% in Wales
- 5% in Scotland
In the year to March, rental prices rose in all regions of England. Unsurprisingly, London saw the greatest increase, of 3.7%.
As a whole, rental prices in England can be grouped in three periods. Prices increased markedly from January 2005 until February 2009, then dipped between July 2009 and February 2010. Since then, prices have spiralled.
Taking London out of the results, rental prices in England have followed a similar pattern, albeit with reduced rental rises from the end of 2010.
Rents rise by 2.6% in year to April
Regional growth
Year-on-year to April 2016, private rental prices have increased in all nine regions of England. London led the way, followed by the East and South East, with rises of 3% and 2.9% respectively. However, annual price rises have been greater in London than the rest of England since November 2010.
On the other hand, the North East, North West and Yorkshire and the Humber have continued to record the smallest annual rent rises.
Paul Smith, CEO of haart estate agents, believes rental accommodation will soon decline, as investors withdraw from the market in the wake of tax changes implemented by the Chancellor. He fears that this could lead to upward pressure on rental prices in the future.
Affordability issues
Smith said: ‘today’s data shows UK private housing rental prices increased 2.6% on the year as affordability issues in the sales market push up demand and therefore prices in the rental sector.’[1]
‘While the number of properties available to rent surged following a rush from buy-to-let investors in advance of the stamp duty changes on the 1st April, we are now seeing a decline in stock as investors withdraw from the market,’ Smith continued.[1]
Concluding, Mr Smith said, ‘ironicallym the government’s efforts to help first-time buyers by penalising investors, could end up hindering them as a shortage of rental properties will drive up rents in the long term, making it more difficult to save up for a deposit.’[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/uk-private-sector-rents-up-2-6-year-on-year