Buy-to-let rents are growing strongly is areas outside London with an average overall increase last year of 5.8%. Rents grew the fastest in the South East at 7.2% but this was very closely followed by the Cambridgeshire area. Good returns were also seen from the Midlands and the trend continues into 2016 at 6.5%. The latest rental index figures show rents rising in 11 out of the 12 regions across the country. The only area that saw a reduction in income was the North West of England as rents struggle to maintain current levels. These figures are likely to continue on an upward spiral should the Government win its case for the proposed tax changes. Interestingly the index reveal a gentle slowdown in the capital, with rent prices for new tenancies in Greater London rising at the slowest rate for almost 2 years. They were still 6.2% higher than a year ago, taking the average new tenancy rent to £1520 per month. So now excluding Greater London the average rent across the UK is £829 per month. In recent years, the capital has seen much faster rates of increase than the rest of the country. It may well be that London has reached its peak as tenants are finding it ever-more difficult to afford the current rent levels demanded. One of the UK’s leading letting agencies said there is a very strong demand for good quality rental properties. This is driven by two factors the first being the impact of the long term structural imbalance in supply and demand of property. The second is the simple fact first-time buyers cannot afford to buy or even in the majority of cases raise the deposit required.
