The cost of renting a home in London fell in July for the fourth month in a row, continuing the first period of decline since 2009.
The average monthly rent for a new lease in the greater London area in July was down by 0.6% year on year to £1,564, according to new figures published by HomeLet.
While the figures show that the pace of the decline has slowed, in June rents fell by 2.9%, the rental market in the capital is now drastically different from just a year ago, when rents rose in the same month by 6.6%.
Rents also fell in the South East, where they declined by 0.9% and the North East where they fell by 1.7%/
Across the UK rents rose by 1.1%, led by increases of 5.7% and 3.6% in Northern Ireland and Scotland respectively, though HomeLet’s chief executive, Martin Totty, said these rises could be explained by a seasonal increase in tenants moving and rental agreements being renewed and warned that there was still significant uncertainty in the market.
He said; "Predicting where the market heads from here is very difficult given the number of competing forces impacting the sector, either already being felt or still being contemplated."
The HomeLet statistics come as new research is published showing that landlords are losing confidence in the rental market.
According to a survey conducted by the Residential Landlords Association, the number of landlords who are optimistic about their ability to relay on a steady income from their properties has fallen by 15% over the last two years, down from 64% in the second quarter of 2015 to just 49% half way through this year.
Richard Lambert, chief executive officer of the RLA, said; “Like any business, the increasing value of the capital assets on your balance sheet will be of little help if you are treading the fine line between profit and loss, especially if you can’t keep up your mortgage payments in the short term.”
While rents rising nationally will be welcomed by most landlords, for those in London, the South East and the North East, where rents have fallen, these figures will add to growing worries created by recent legislative changes which have hit landlords’ finances.
Landlords in these areas are finding themselves caught between rising costs due to the introduction of Section 24, which phases out mortgage interest tax relief, and the hike in Stamp Duty on second homes, the ban on letting agents’ fees, which has seen these costs passed on to landlords, and the cap on tenants’ deposits.
If you’re a landlord worried about the impact of falling rents and regulatory changes on your finances call Landlord Debt Advisory on 0161 222 4311 or go online to landlorddebtadvisory.com.