|Focus||Economy||Sales||Lettings||Stat of the Month
Looking back at 2017
Rents rose faster in 2017 than in 2016 to oreach £960 PCM. This is the first reported annual increase since 2014, with rental growth increasing by a third from 1.8% in 2016. Most of this rise comes from a pickup in London rents, following falls in 2016. Rents increased across every region of Great Britain last year. In reversal of 2016, the South West and South East had the fourth and sixth fastest rates of rental growth in England, with average rents reaching £796 PCM and £1040 PCM respectively at the end of the year. Rental growth has been supported by a fall in the number of homes on the market, with the biggest drop in London. Consequently, London went from having the slowest rate of rental growth in England in 2016 to the fastest at 3.2% in 2017, with the average rent at the end of the year averaging £1,706 PCM. The rise was a result of the changes to stamp duty for second homeowners gradually working its way through the system, acting as a disincentive for prospective landlords. And this has hit the Capital more than other areas because homes tend to cost more. As a result, there were 5,400 fewer homes bought by a landlord in 2017 than in 2016 in London, resulting in 21% fewer homes available to rent.
Across Great Britain in 2017, the proportion of homes bought by landlords dropped to a nine year low of 12.5%. The drop in the number of landlord purchases has meant the number of homes available to rent has fallen at a time when affordability pressures are keeping some prospective buyers in the rental sector. In December 2017 there were 4% fewer homes to rent across Great Britain than in December 2016, which is increasing competition among tenants for rental homes. And this looks set to drive even faster rental growth in 2018.