25th April 2014
Private rental prices paid by tenants in Great Britain rose by 1.0% in the 12 months to March 2014 according to the latest report from the Office for National Statistics. Private rental prices grew by 1.0% in England, 1.3% in Scotland and 0.6% in Wales in the 12 months to March 2014.
Rental prices increased in all the English regions over the year to March 2014, with rental prices increasing the most in London (1.4%).
Commenting on the figures, Oliver Atkinson, director of the UK-wide online letting agents, urbansalesandlettings.co.uk, says: “Rental prices have pretty much reached their peak, even in the capital. In most areas of the country, rental growth is now comfortably below inflation.
“Landlords up and down the country have had a reality check over the past year. The balance of power is swinging back in favour of the tenant.
“Rents shot up so much between 2009 and 2012 that since then there has been very little room for manoeuvre. The resurgence of the sales market has dampened demand for rental property, while supply has been boosted by the growing number of amateur landlords piling back in.
“The changes to pensions announced in the Budget are likely to see the supply of rental property increase further in the months ahead, as people turn to bricks and mortar for a retirement income over annuities. Budding landlords need to go into the current market with open eyes. Tenants are savvier, achievable rents are lower and complacent landlords with overly geared properties could be quickly exposed if rents start to fall.
“The divergence in price growth in London between rents and values says it all. Over the past year, values have risen by 15% or more, whereas rents have risen by just 1.4%. The market has changed considerably.”