Rents 'rose at slowest rate for seven years at 1.6% across Britain'


Rents increased at their slowest pace in seven years in 2016, according to an index.

Lettings network Countrywide said rents increased by 1.6% across Britain in 2016 to reach an average of £927 per month.

The annual increase was around half that seen in 2015, when rents recorded a 3.1% uplift. Last year also marked the slowest annual increase seen since 2009, when rents increased by 0.9%.

The slowdown has been driven by an increase in the number of homes available to rent, with London seeing a particular increase in the choice of properties for tenants, Countrywide said.

Across London, average monthly rents ended the year 2.9% down on 2015, to stand at £1,246 on average in December - £37 per month less than in December 2015.

Looking just at central London, rents plunged by 9.4% annually in December, to reach around £2,381 per month.

In Scotland, rents were down by 3.1% year-on-year, to reach £628 on average. In Wales, rents increased by 5.6% annually, taking them to £700 per month typically.

A stamp duty hike for buy-to-let investors on April 1 2016 prompted a rush of landlords snapping up properties ahead of the deadline.

Many of the homes that were bought during the stampede will now be available to renters.

Johnny Morris, research director at Countrywide, said landlords have had to work harder to attract tenants as the number of homes available to rent has grown.

He said: "Landlords are increasingly tempting sitting tenants to renew contracts with the promise of unchanged or even lower rents."

But he warned: "Rental growth will likely increase in 2017. Squeezed yields, fewer tax breaks and higher stamp duty rates are likely to deter landlords from expanding their portfolios.

"Fewer homes on the market will leave tenants with less choice and negotiating power."