Search Acumen comments on ONS index of private housing rental prices (IPHRP) in Great Britain: Sept 2016
- Private rental prices paid by tenants in Great Britain rose by 2.3% in the 12 months to September 2016; this is unchanged compared with the year to August 2016.
- Private rental prices grew by 2.5% in England, fell by 0.1% in Scotland and grew by 0.1% in Wales in the 12 months to September 2016.
- Rental prices increased in all the English regions over the year to September 2016, with rental prices increasing the most in the South East (3.5%).
Andy Sommerville, Director of Search Acumen, comments:
“Rents are continuing to rise despite the surge in buy to let investments at the beginning of the year and we could now see a real problem of supply begin to emerge in the rental market as investors turn away from property. Although there has been a welcome post-Brexit jump in buy to let investment from overseas buyers since the fall in the pound, there remains a real risk that Generation Rent will be the ultimate losers of the government’s tinkering with stamp duty.
“Rents are already nearing the limit of affordability relative to wages in the South East of England and London, with increases of 3.5% and 2.7% respectively. It is no longer possible for landlords to keep increasing rents or for investors to pursue high yields on new properties as the SDLT surcharge continues to weigh down on the rental market. Less pressure in other parts of the country will see landlords start looking north for investment.
“Longer term, changes to landlords’ tax liabilities combined with the stamp duty surcharge could see many would-be buyers drop out of the market, storing up a problem further down the line, with too few rental properties on the market and rents creeping up again. The government should review stamp duty at the Autumn Statement and work with housebuilders, housing associations and institutional build to rent investors to deliver more homes across a range of tenures. Generation Rent and investors alike would thank them for it.”
This article was submitted to be published by Search Acumen as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
