London rental growth rebounds
London rental growth rebounded to 2.2% in July from -0.8% in June owing to a shortage of stock, Countrywide’s Monthly Letting Index has found.
The proportion of landlords buying London homes fell to 10.5% in July 2017, the lowest rate for seven years, which is causing available stock to slide.
To put this into context in 2015 20.9% of purchases were from investors on average.
Government measures to curb buy-to-let landlords, including the 3% stamp duty surcharge introduced in April 2016, are likely to be behind the reduction in rental stock coming to market.
Johnny Morris, research director at Countrywide, said: “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”
The jump in London rent growth was so significant it drove annual growth for the whole of Great Britain from 1.1% in June to 2.2% in July.