Rental price inflation in the UK has now fallen below the general rate of inflation reveals the latest research from the HomeLet Rental Index, suggesting landlords are conscious of charging affordable rents for their tenants.
The general rate of inflation is now running at 1.8% but:
- the average UK rental value in February was £895pcm – this is an 0.8% increase on the same period last year (£888pcm);
- average rental values in Greater London in February 2017 stood at £1,520pcm - 0.4% higher than February last year.
The study also revealed that:
- more than half of landlords surveyed feel they will need to increase rents within the next 6 -12 months;
- 76% say they will not be expanding their property portfolio this year;
- 96% of landlords are happy with their current tenants.
The results of the survey suggest a dilemma for many landlords. With impending tax changes and other financial constraints for landlords threatening to eat in to their profits, the slowing rate in rental price inflation suggests that landlords still appear to be acutely conscious of the need to ensure rents are affordable for tenants.
Martin Totty, HomeLet’s Chief Executive Officer, commented: “Our research again demonstrates that the vast majority of landlords have positive working relationships with their tenants.
“In recent months, we have seen landlords treading very carefully with rental price rises, amid concerns about tenants’ ability to pay. With more than one in five landlords (21%) blaming an increase in their tax liability for raising rents, it remains to be seen if this can be sustained. Landlords will hope the Chancellor does not make it harder for them to continue supporting their tenants in this way, with further changes to the tax system or legislation, as he prepares to unveil his Budget on the 8th March.”