In the three months to March 2016 London rents rose by 7.7% year-on-year to average at £1,536.
London rents are leading the way in terms of annual growth, HomeLet’s Rental Index has found.
In the three months to March 2016 London rents rose by 7.7% year-on-year to average at £1,536.
For the rest of the UK excluding London rents rose by 4.9% to average at £755 – although there were significant annual increases in Scotland (7.3%), East Midlands (6.8%) and the South East (6.4%).
The North West of England was the only region which saw quarterly rents fall (-3.5%) year-on-year.
Martin Totty, Barbon Insurance Group’s chief executive officer, said: “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.
“However, despite these factors, we expect the private rental sector to continue to play a crucial role in a housing market where population growth will continue for the foreseeable future according to official projections.”
