Rents in the UK up 1.3% in the 12 months to May 2019, latest index shows
Rents in the private rented sector in the UK increased by 1.3% in the 12 months to May 2019, up from 1.2% in the previous month, the latest official data shows.
In England rents increased by 1.3%, in Wales by 1.1%, in Scotland by 0.8%, and in Northern Ireland rents were up 2.1%, according to the figures published by the Office for National Statistics (ONS).
Generally rental growth has slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period. But it has started to pick up since the end of 2018, driven by strengthening growth in London.
Rental prices for the UK excluding London increased by 1.5% year on year, unchanged since January 2019, while in London rents were up 0.9% year on year, up from 0.5% in April.
A regional breakdown for rents in England show that the largest annual rent increase was in the East Midlands at 2.1%, unchanged from April, followed by a rise of 2% in the South West, up from 1.7% in April, and then a rise of 1.8% in Yorkshire and the Humber, unchanged since February 2019.
The lowest annual rental growth was 0.5% in the North East, up from 0.4% in April, followed by London with a rise of 0.9%, up from 0.5% in April.
There could be pressure on some landlords to consider increasing rents now that they have filed their tax returns, according to Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA).
‘We do not see it as a coincidence that several rental indices are show that, following a protracted period of softness, average rents in London are once again increasing. Despite the current political and economic uncertainty, we hope a change in leadership will be seen as an opportunity for the Government to demonstrate its support for landlords, which goes hand in hand with helping people get on the property ladder,’ she explained.
‘Growing pressure on landlords to increase rents in order to make ends meet will ultimately have a detrimental effect on renters’ ability to save for deposits to buy their own homes. The Government should be careful to ensure that any future regulation around the private rental market does not further shrink the appetite of private landlords to satisfy the growing demand of tenants. The IMLA will continue to closely monitor the impact of the tax and regulation changes,’ she added.
Tom Gatzen, co-founder of Ideal Flatmate, believes that changes to the sector have deterred buy to let investment to a degree, and the latest introduction of a tenant fee ban could see rents climb higher as letting agents pass lost revenue costs onto the landlord.
‘While the Build to Rent sector is going some way in addressing the supply of new rental properties, more must be done to help a sector that is currently buckling under the weight of a nation that is largely dependent on it to put a roof over their head,’ he said.
The lettings fees ban in England could have an impact going forward, according to Tom Woollard, co-founder of Bunk. ‘While it’s far too early to see any official increase in rent hikes as a result of the tenant fee ban, there has already been a number of reports whereby letting agents have increased rents stating the ban as the direct reason, some even doing so prior to the implementation of the ban,’ he said.
‘This unfortunate attempt to recoup financial losses will further stoke rental unaffordability and it looks as if the rental landscape is going to get tougher for the UK’s tenants before it gets any better,’ he added.
