Annual rental growth in Britain fell back to 1.5% in the year to February 2018

Annual rental growth in Britain fell back to 1.5% in the year to February 2018
13/03/2018 , by , in INTERNATIONAL

The average cost of a new let rose to £954 per calendar month in Britain in February but the rate of annual rental growth slowed to 1.5%, down from 2.4% the previous month.

The latest index from Countryside also shows that rents in London grew faster than any other region for the third month in a row to £1,686, some 3.1% above last year’s level.

Scotland was the only region to see rents fall year on year with a decline of 4.1% to £587 while in Wales they were up marginally by 0.8% to £651 per month.

After London the next biggest annual rise was in the Midlands, up 2.8% to £669, followed by the South West with growth of 2.6% to £786, then the South East up 1.7% to £1,039.

The North of England saw rents rise annually by 0.7% to £623 and in the East there was year on year growth of 0.2% to £926 per month.

The Countrywide report also looked at landlords selling their properties and found that the average landlord who sold their rental property in 2017 did so for £86,651 more than they paid for it, having owned the home for an average of 8.7 years.

London landlords who sold in 2017 gained an average £253,981, over four times more than the average landlord selling outside the capital. Indeed, 28% who sold their home in London did so for at least twice what they paid for it an average of 8.1 years ago.

Landlord gains are slightly behind owner occupiers, who on average made £92,886 when selling their home in 2017. The average owner occupier made 7% more than a landlord when selling their home last year. This is because the average landlord selling their property in 2017 owned it for 8.7 years, rather than nine years for an owner occupier.

With the highest house prices and strongest capital growth over the last nine years, landlords who sold in London and the South East generally made the biggest gains. Some eight of the 10 places where landlords made the highest percentage gains were in London, with Maldon in Essex at 118% and Pendle in Lancashire at 109% being the only exceptions.

Landlords in the North East made the smallest gains at £23,874, over 10 times less than a landlord in London. Landlords selling in Selby in North Yorkshire made the lowest percentage profit of 14%, but still made £9,703 on average.

‘House price growth has driven investor gains. Landlords selling in 2017 owned their homes for nearly nine years. In eight of those last nine years house prices have risen. Even in areas where price growth has lagged behind most landlords have made a profit from rising prices,’ said Johnny Morris, Research Director at Countrywide.

‘Rents continued to grow in January. London continues to see the greatest falls in the stock of available homes to rent, on the back of reduced investor activity, this scarcity of supply is driving rental growth,’ he added.

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