More choice led to fall in cost of renting in May, report says

Rental prices dipped in May as a fresh tide of buy-to-let properties flowing onto the market gave tenants more choice, according to an index.

The average monthly private sector rent across England and Wales in May was £792, marking a 0.2% fall compared with April, the report from letting agents Your Move and Reeds Rains found.

On April 1, a three percentage point stamp duty hike was imposed on investors purchasing buy-to-let properties. Estate agents previously reported seeing a rush of landlords snapping up properties to beat the deadline.

The report said that many of these properties bought by landlords are now starting to appear on the rental market. With more properties available for tenants to choose from, this has helped to ease the upward pressure on rents.

Adrian Gill, director of Your Move and Reeds Rains, said: "A tide of new properties to let has disrupted the normal dynamics of supply and demand.

"Landlords escaping a much larger stamp duty bill by completing their purchases before April 1 have now finished their repairs and paperwork, with these homes to let competing for tenants in May and into June. That short-term mismatch has made May an exceptional month, with excellent deals available for some prospective tenants."

Across the country, rents have increased by 1.8% over the last year, which is half the 3.6% annual rate of growth recorded in January 2016.

But Mr Gill said that in the longer term, with landlords also facing tax changes that could eat into their profits, there could be a "drought" of homes to let that will push up prices for tenants.

He said: "All tides go out again - and this is definitely no exception. Overall the tax changes to the buy-to-let industry will discourage some property investors, and most of the properties that became available to let in May will have been planned purchases brought forward from later in the year. The net effect will not be more properties to let - quite the opposite."

The index, which is based on rents achieved on around 20,000 properties, found that rents in London fell by 0.7% month-on-month in May to reach £1,220 per month on average. This was the steepest fall of any region.

At the other end of the spectrum, rents in Wales increased by 1.4% month-on-month, taking the average rent there to £559 per month.

Despite the general dip in rents in May, tenants' finances worsened, with 9.3% of all rent due being late, compared with 8.1% in April.

The report said that while tenants have become more likely to fall a little behind with their rent by one day or more, the chances of tenants developing more serious financial problems have fallen. In the first three months of 2016, tenants were less likely to fall two months or more behind with their rent than they were in the last three months of 2015.

Mr Gill said: "There's no room for complacency. Rents have dipped unexpectedly in May but remain far higher than in previous years, while household earnings have lagged the wider recovery for some time. Landlords need to be aware of such risks - and always keep lines of communication open."

The most viewed properties
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The most viewed properties

In Zoopla's list of the most viewed properties in recent weeks, this whopper comes in at number 9.

The £2 million property in Doncaster has planning permission to be turned into a hotel or wedding venue, and has been seen a whopping 14,000 times in a month.

This two-bedroom flat in Canary Wharf is on the market for £675,000. The attractions of imagining your life in a warehouse conversion with plenty of space and light means that 16,000 people have looked at it in a month.

This new five-bed property in South Oxfordshire is an excellent example of how much prices have risen in that part of the country - with an asking price of £1.195 million.

Clearly the attractions of being near Reading (without actually being in Reading) are driving enormous demand - with 37,000 views in a month

This five-bedroom detached house in Skelmersdale is on the market for offers over £210,000. The fact that such a normal-looking family house has been seen by 45,000 people in a month owes something to the fact that the owners built it themselves - to a particularly high spec - and as a result it is pricey for the area.

This four-bed detached house doesn't look particularly striking from the front, so it must be hard to see why it's worth £299,950 - an impressive sum for the area. This goes some way to explaining its 69,000 views in a month.

All is revealed round the back, however, as the property opens up in acres of glass to reveal spacious open-plan living.

This newly built seven-bedroom detached house has enough attractions to justify the £3.25 million price tag (not least the underground car showroom with space for 30 cars). The 73,000 views may also have something to do with the elegant writing style of the estate agent.

Phrases used in the listing include: "This must be the jewel in the crown for Royal Sutton Coldfield gentry." And: "The rear garden is enchanting."

On the outside it's a bog standard terrace in Bootle, Merseyside. But on the inside its a dramatically refurbished property with statement lighting aplenty.

It's no wonder this £85,000 property had 80,000 views in a month - and is the third most-viewed home.

A two-bedroom flat in the former home of Arsenal Football cub is on the market for £660,000. Clearly die hard fans have been captivated by the idea of living in this iconic building - complete with a grass courtyard with plenty of room for a kick-about. It has been viewed an impressive 95,000 times, making it the second most viewed property.

But the most viewed home in the country is the six-bedroom Lindisfarne Farm in County Durham - on the market for just £175,000.

An incredible 475,000 people have seen it in the past month, drawn by the enormous rooms, the incredible views, and the idea of being able to live a simple life, away from it all, for just £175,000.


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