Rental growth rate doubles between June and July, new data shows

The rental market experienced a difficult first half of the year as political uncertainty meant fewer people than in recent years choosing to move home, keeping growth levels subdued.

However, according to new data, the second half of the year has seen something of a change in fortune for the market, and between June and July, the rate of increase in prices paid by tenants doubled.

The rental market report from Countrywide shows that between June and July, rental prices for the UK as a whole grew by some 2.2 per cent. It said this change was brought about by the recovery of the London property market, which had seen a stagnating in terms of rental property in the last few months.

Countrywide also said that a fall of 18 per cent year-on-year in terms of available rental stock in London meant a rise in rental prices, as tenants had to compete to secure somewhere to live, paying more in the process.

This is mostly driven by the three per cent Stamp Duty levy that came into play last year, which meant it was more expensive for landlords to put their money into the rental sector.

The rush to beat higher Stamp Duty rates in April 2016 caused a spike in the number of homes to rent, but that has now worked its way through the market.The stock of homes to rent is now falling in the more expensive parts of the country because higher tax rates have dissuaded large numbers of landlords from buying. Ultimately this means fewer homes on the market and higher rents.

However, while there was a drop in rental stock in London, the rest of the country had a different experience.

Over the last 12 months, the nationwide private rented sector experienced a rise of four per cent in terms of available properties, although the rate of growth in this regard is slowing somewhat.

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