Average rents in Britain up 1.8% on 12 months to September, but fall in Wales
Average rents in Britain increased by 1.8% in the year to September 2019 to £998, rising everywhere apart from Wales where they fell by 1.4%, the latest lettings index shows.
It means that the average rents in Wales was £673, according to the latest Hamptons International monthly lettings index which is based on achieved rather than advertised rents on newly let properties.
Rents in the South drove rental growth, with the South West recording the strongest annual rental growth at 4.5%, taking the average rent in the region to £851, followed by the South East, up 3.8% to £1,096 and the East up 2.1% to £984.
Rents in London increased by 1.8% to £1,745, in Scotland they increased by 1.1% to £667, in the North of England they rose by 1% to an average of £657 and in the Midlands there was annual growth of just 0.4% to £693.
The index report also reveals that over the last few years a slowing sales market has triggered some home owners to let their homes instead of selling but since tax changes were introduced in the 2018 Budget, the proportion of homes let by accidental landlords has fallen.
The proportion of homes that came onto the rental market having been listed to sell within the previous six months in Britain peaked at 8.6% in 2018 following five years of growth. However, this year the proportion of homes let by accidental landlords fell to 7.1%, the first fall since 2014 and the lowest level in five years.
Every region recorded a fall in the proportion of homes let by accidental landlords, with London seeing the biggest drop. Yet London is still the accidental landlord capital of the country. So far this year 10.1% of homes listed to rent in London had been up for sale during the previous six months, down from a peak of 12.6% in 2018.
The South East recorded the second biggest fall in the proportion of homes coming to the rental market having been up for sale with a drop of 2.3% year on year, followed by the East of England down 1.9%. Meanwhile Scotland and Wales saw the smallest changes to the proportion of homes let by accidental landlords with a fall of 0.4% and 0.3% respectively.
‘Despite a weaker sales market, which tends to encourage accidental landlords, the proportion of homes to let having previously been listed for sale has fallen for the first time in five years. The tax changes being introduced in April 2020 will increase the capital gains tax bill for some accidental landlords who choose to sell after that date,’ said Aneisha Beveridge, head of research at Hamptons International.
‘Britain’s most expensive regions and where prices have risen the most, recorded the biggest fall in accidental landlords. This is unsurprising given that landlords in these areas will have seen the greatest gains, which are likely to exceed the annual capital gains tax allowance, and therefore could see their tax bills rise the most,’ she added.