Residential rents in Britain have increased by 1.1% year on year to an average of £950 per month, the latest index data shows.
But there is some regional variation with the South West of England seeing rents for new tenancies increasing by 4.6% year on year to an average of £786, the highest annual rise, according to the Countrywide monthly lettings index.
Average rents were up by 2.8% in the East of England, by 2.3% in the Midlands and the North of England, by 1.4% in Scotland, by 1.1% in the South East of England and by 0.1% in Wales. Average rents bell by 0.8% in Greater London.
The index also shows that fewer landlords are from overseas, hitting a new record low. Overseas landlords owned 5% of all homes let in Britain, down from 12% in 2010.
London has seen the largest fall with 11% owned by an overseas landlord, down from 26% in 2010. In the prime central London market overseas based landlords owned 31% in 2010 but that is now down to 23%.
The number of European based landlords has been gradually falling over time, more so than any other nationality. In 2010 they made up 39% of all overseas landlords in London but that is down to 28%. They were the biggest group of overseas investors in London until 2014.
Asia based landlords are now the biggest group of all overseas based landlords in London at 33%, followed by Europeans at 28%, North Americans at 10% and Middle Eastern at 9%. Outside of London, Europeans at 37% remain the biggest group of overseas landlords.
The proportion of overseas based landlords has fallen in every region. London has always had the highest proportion, currently 11%, followed by the South East at 5%. Outside London and the South East, less than 5% of homes are let by an overseas landlord. Scotland, Wales and the Midlands have the lowest at 3%.
The average overseas based landlord earnt 35% more in rent last year than one living in the UK. They earnt £5.4billion in rent over the last 12 months, 11% of the £50.6billion paid by private tenants in Britain. Over half the income earnt by overseas landlords came from rental homes in London.
‘Falls in London were off-set by higher growth across the rest of the country. The fall in the capital was driven by lower rents in the outer areas of London as the ripple effect from falling rents in central London continues,’ said Johnny Morris, research director at Countrywide.
‘The growth of the private rented sector since 2010 has not been driven by overseas investors. A steady increase in foreign investors’ tax bills combined with more recent falling expectations of price growth in London has led to a decline in foreign investment in buy to let,’ he pointed out.
‘As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings, overseas investors also saw the removal of capital gains tax exemptions in 2015,’ he added.