From City AM:
Rents kept on an upwards climb in August, but the pace of rent growth is slowing. In August, prices grew by 3.1 per cent year-on-year, according to HomeLet's rental index. Tenants signing new agreements paid an average £913 a month.
But this increase compares with annual inflation of between 3.5 per cent and 3.8 per cent for the last four months, and this time last year, year-on-year growth was nearly six per cent. The slowdown was most apparent in London and the sought east, and it correlates with the stamp duty tax changes that came in at the beginning of April.
Why on earth they imagine that rents should increase smoothly and you can simply project from the past into the future is anybody's guess. Rental values are a function of how well or badly the economy is doing; you have to forecast the economy and work backwards from that.
It's the last bit that rankles. There's no reason to assume that taxes paid by landowners/landlords collectively have the slightest impact on rents, they will neither push them up nor down.
Nonetheless, it makes a refreshing change from the squealing of a few months ago:
Rents increased across most of the UK as a stamp duty hike for buy-to-let landlords came into force, an index has found. The average rent in the three months to the end of April was £764 for the UK, excluding London, up from £755, the month before...
Landlords are also facing a financial squeeze due to restrictions on their tax breaks. It has been suggested that in the longer-term, tenants may see the extra costs passed on to them through increases to their rent.
Wednesday, 7 September 2016
From City AM: