Average new let rent up by over 3% in year to June 2019
The average cost of a new let in Britain increased by 3.1% to £986 per calendar month in June, driven by rising rents in the South of England, according to the latest lettings index.
The figures from Hamptons International show that excluding London average rents increased by 1.7% to £787 while in Greater London they were up by 4.3% to £1,737. Overall rents are at their highest level since April 2016.
There was also strong annual growth of 4.5% in the South West to an average of £821 and in the South East, up 3.6% to £1,078, while Scotland recorded an increase of 2.6% to £655.
But elsewhere the market is slower. There was an annual rise of just 0.9% in the Midlands to £685 and 0.5% in the North of England to £631. Rents fell year on year by 0.2% in the East of England to £950 and they fell by 0.4% in Wales to £668.
The index report also looked at the proportion of homes let by company landlords and found that it has been rising steadily since 2016 when the tapering of mortgage interest tax relief for non-company landlords was announced.
In the first half of 2019 some 12% of homes were let by a company landlord, reaching the highest level since 2011 and up from 9% in 2015.
Hamptons International estimates that company landlords own 641,480 homes in Britain this year, some 42% more than in 2015 when 452,600 homes were let by company landlords. It says that the increase is partly due to the rise in the proportion of homes let by company landlords, but also due to the increase in the overall size of the rental sector.
London landlords are most likely to own a buy to let property in a company structure. In the first half of 2019 some 13% of new lets were owned by a company landlord, up from 12% in 2015 and 2018.
Meanwhile landlords in Wales are least likely to own a buy to let in a company name. Scotland has seen the biggest increase in the proportion of homes let by a company landlord since 2015, up 6%, followed by the North of England up 5% and the South of England up 3%.
‘More than one in ten rental properties are now owned by private companies, an indication that the sector continues to professionalise. Increasing taxation for private landlords combined with the growth of the build to rent sector has meant that more companies are letting homes than at any time since our records began,’ said Aneisha Beveridge, head of research at Hamptons International.
‘London, where landlords tend to have higher levels of debt and often the most to gain from corporate ownership, has the largest proportion of homes let by a company. However, it’s not always more profitable to put a buy to let into a company as other associated costs come into play,’ she pointed out.
‘Strong rents in the South drove rental growth in Britain in June. Low stock levels, particularly in the South, continue to put pressure on rents. Rents rose in six out of eight regions in Great Britain, with the East and Wales recording small falls,’ she added.
