The average rent in the UK is now £764 a month – up by 5.1% since April 2015, according to the latest data.
The HomeLet Rental Index also found that rents in London are 7.7% higher than a year ago – at £1,543 a month.
These are HomeLet’s first rental figures since the 3% stamp duty surcharge on people buying second homes or investment properties was introduced on 1 April. They reveal that the tax hike has had little impact so far on the rental market. The annual rise in rents in March 2016 was 4.9% – just 0.2% lower than in April.
Scotland was the best performing region in the UK, with new tenancies costing 11.4% more than they did a year ago. Monthly rents now average £704 – they were £632 in April 2015. The East Midlands was the next best performer with a 7.9% rise in rent for new tenancies. Average rents now stand at £646 a month.
The North West was the only region to see rents fall, albeit slowly – down by 1%. Average rents in the three months to April 2016 were £659 – they were £666 a year ago.
Martin Totty, chief executive of the Barbon Insurance Group, which owns HomeLet, says: “It may be that over the next several months, the trends observed in the rental market begin to reflect the signs of some slowdown in the rate of house price growth that we are now beginning to see, and that will be something to watch closely.
“But more broadly, there has been very little to alter the fundamental relationship between demand and supply, especially in those parts of the country where demand-side pressure is greatest.”
Mr Totty says that landlords may “be feeling squeezed” as a result of the taxation changes George Osbourne has introduced in recent months. “We will have to see whether landlords try to pass their higher costs on, whether buy-to-let property investment diminishes in popularity and whether tenants are able to afford further increases in rents,” he adds.