UK rent prices grow +2.4% annually
By Alex Timperley, 30 August 2016
Property and buy-to-let has been the subject of doom and gloom predictions for what seems like an eternity. As recently as Q4 2015 some experts were predicting a housing crash, a landlord capital flight, or, in some cases, worse. Contrary to these predictions though, landlords have seen confirmation of what they had suspected all along – the housing market and buy-to-let are actually doing quite well.
According to the latest figures from the ONS, private rental prices paid by tenants in the UK rose by 2.4% in the 12 months to July 2016, unchanged compared with the year to June 2016. Private rental prices grew by 2.6% in England, 0.2% in Scotland and were unchanged in Wales (0.0%) in the 12 months to July 2016. Rental prices increased in all the English regions over the year to July 2016, with rental prices increasing the most in the South East (3.5%).
This news sits in contrast to the doom mongers who had predicted a slowing in the market and comes off the back of other good news for landlords. Despite the outlying peaks in the market (created by the rush to purchase properties before the tax increases in April) rental income and overall capital gains have remained steady.
There have been other factors pointed to by some commentators about struggles in the market such as some of the big lenders tightening their lending criteria. Newcastle Building Society, Barclays, Foundation Home Loans, and TSB recently announced that they are tightening buy-to-let lending with TSB increasing rental coverage ratio by 20% to 145.
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As the third financial quarter of 2016 nears its end we can expect that the positive news for landlords will continue amid other economic gloom. Rising rents, rising demand, and falling stocks mean that the situation is unlikely to deteriorate for some time.
One factor that many have been pointing to as a cause for the recent upturn in fortunes is the increasing service and quality received from quality letting agents. As landlords find it easier to market, fill, and keep their properties full there has been a much wider scope for rental increases and long term tenancies.
Letting agents providing landlords the ability to take a hands-off approach to individual investments is allowing landlords to manage a much wider portfolio across a number of properties. Serious business issues can be concentrated on rather than smaller maintenance issues, for example.
In further advances landlords are enjoying much longer tenancies as customer service has improved dramatically. As busy landlords often face challenges in arranging timely services such as maintenance a letting agent has reduced these unnecessary issues allowing tenants and landlords an easy and problem free relationship.
We can expect standards to continue rising across the sector and for performances to follow suit as the year draws to a close and economic figures confirm that the housing market is as strong as ever.
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