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Outlook for rental market is strong despite slowing growth in rents

Rents across the UK continued to rise during July, building on the consistent increases seen during the first half of the year, new data from the HomeLet Rental Index reveals. However, the rate of rent growth continues to slow as we enter the second half of the year.

The index shows that rents agreed on new tenancies across the UK (excluding London) over the three months to the end of July were up by 2.3%, compared to the same period in 2015. In the capital, meanwhile, rents were 4% higher.

The data suggests that landlords have been able to continue securing higher rents on new tenancies despite the economic uncertainties created by the UK’s vote to leave the EU in June.

Commenting on the report, Martin Totty, Barbon Insurance Group’s CEO, said: “Ultimately, rents will be determined by supply and demand in the private rental sector; what we know here is that population growth will continue to increase demand, and that the housing stock isn’t growing quickly enough to meet that demand. However, with rents ultimately limited to a tenant’s ability to pay, rents are likely to continue to climb, albeit at the slowing pace noted most recently.”

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