Rent on properties outside London rose to £755 a month in the three months to March 2016 - 4.9% higher than the same period a year ago, according to latest data.
The HomeLet Rental Index, which uses data on the rental amounts agreed, the number of tenants moving into the property, together with their employment status, income and age for around 350,000 tenants a year, also reveals that properties in the capital attracted rent of £1,536 a month – up by 7.7% annually over the three months to March 2016.
Of course the rent tenants pay may be lower depending on how many people they’re sharing the house with.
The North West was the only area in the UK to see a drop in rents annually over the three months to March 2016, falling by 3.5% over the year.
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The specialist landlord insurance provider has also seen a pickup in enquiries from property investors, with 37% of insurance policies bought compared with 24% in the same period in 2015, suggesting that there has been a spike in investors purchasing their buy-to-let properties before the stamp duty hike came into force on 1 April 2016.
Rents have risen in almost every area of the UK
Commenting on the data, Martin Totty, chief executive of Barbon Insurance, which owns HomeLet, says: “We’ve continued to see increases in rents on new tenancies in almost every part of the UK during the first quarter, as the private rental market has responded to the pressures of an imbalance between demand and supply.
“However, external factors may now come into play: the stamp duty increase has already had an impact and that surge in the acquisition of property by landlords could now cause a short-term increase in the supply of rental property in some areas of the country.
“In the longer term, changes to rules around buy-to-let mortgage interest being offset against tax bills, coupled with the Bank of England’s instruction to lenders to apply more exacting criteria on buy-to-let lending, may have a limiting effect on supply.”