More property options for tenants has led to a slower pace of rental growth so far in 2017 in the UK, with asking values up just 1.8% year on year.
This is the lowest rate of annual growth since the fourth quarter of 2014 and less than half of the rate recorded a year ago, according to the latest index report from property portal Rightmove covering the first quarter of 2017.
The data also shows that for the first time since 2014 asking rents outside London fell in the first quarter of the year, down by 0.4% on the previous quarter, taking the average to £768 per month.
In Greater London the average asking rent in the first three months of the year was £1,937 per month, up 1.5% quarter on quarter while the annual fall has gone from a decline of 4.4% in the fourth quarter of 2016 to 4.2% in the first quarter of 2017.
The report points out that new rental properties coming to market have been increasing since the rush of buy to let purchases ahead of the additional stamp duty that came in last April. The result is a 12% increase in available properties for tenants to choose from compared to the first quarter last year, meaning that letting agents need to work harder to secure suitable tenants for their landlords’ properties, to ensure any void periods are limited.
The time it takes to let a property has been calculated based on agents who have marked properties as let agreed on Rightmove. Nationally, it’s taking 10% longer on average to secure tenants than the same period last year. The time has increased in all regions except Wales, which has sped up by 5%.
In London, asking rents rose 1.5% compared to last quarter, but annually the price fell by 4.2%. Rental prices have been falling over the past year in London as stock has been increasing, so it’s not a surprise that it is the most affected region for the length of time to secure a tenant, with properties now taking 20% longer to let than this time last year.
‘The supply boost following last year’s buy to let frenzy in the first few months of the year has continued through to 2017, introducing more competition in the market for letting agents trying to secure suitable tenants for their landlords’ properties,’ said Rightmove’s head of lettings Sam Mitchell.
‘This extra choice for tenants in many areas has inevitably led to properties taking longer to let than this time last year. However, agents are still reporting that well-priced properties in popular areas are letting quickly,’ he pointed out.
He also explained that the new tax changes that started to phase in from this month may also lead to some landlord’s selling off properties and the extra stamp duty on buy to lets may deter some landlords from expanding their portfolios, so now seems to be the right time for tenants who want to have more choice to look around.
‘Agents’ properties need to stand out even more than before, so carefully considering how your property is presented is really important. Now might be the right time to encourage landlords to give the place a lick of paint or some new furniture to give them the edge to help secure the right tenant,’ he added.
