Modest rental growth recorded in December
Rent paid by tenants to private landlords in Britain rose by 1.2% in the year to December, the Office for National Statistics (ONS) said. This is the lowest annual growth since the ONS’ records began in January 2012.
In England, private rental prices grew by 1.3%, Wales saw growth of 1.7% while Scotland saw rental prices increase by 0.4% in the 12 months to December.
Private rental prices in London increased by just 0.4% in the 12 months to December, which is significantly below the average for Great Britain.
Paul Sloan, operations director for Haart, said: “Rents are rising but at a slower rate than before. This is good for both landlords and tenants. A rise of between 1.3% and 1.4% in England is sustainable.
“Landlords have got some capital growth and will benefit from higher yields but it is also good news for tenants that increases are modest – at least until the proposed ban on tenant fees are introduced.”
The government announced last week that the implementation of the ban on letting agents’ fees levied on tenants will not take place before spring 2019 at the earliest. However, many experts believe that letting agents, many of which are keen to maintain their revenues, will attempt to simply claw back lost earnings next year by lumping extra costs on to landlords.
If the fees ban does feed through to higher landlord costs, this could in turn feed through to rents, according to Sloan.
He continued: “Wages are likely to be rising by more than rents and realistically, landlords are unlikely to put up rents on an existing tenancy by 1%.”
“If they have good tenants, they are likely to wait and increase it by 5% later down the line, or just increase the amount for any new tenancies.”