South West leads rental increases
In the three months to July 2015 rents in the South West of England rose by 11.4% year-on-year from £820 to £914, while in Scotland they increased by 11.2% from £599 to £667.
In Greater London they rose by 9.5% from £1,404 to £1,538.
Martin Totty, chief executive, Barbon Insurance Group, parent company of HomeLet, said: “Regions which have long been associated with a buoyant rentals sector, such as London, continue to experience rising prices, but rents are also rising in many other parts of the country at similar rates.
“The South-West of England, for example, is benefitting from its popularity with those attracted to the area for lifestyle reasons, as well as the strong local economy in many of the towns and cities of the region.”
Rents rose in all regions with the exception of the North West, where they fell by 1.4% from the three months to July 2014 to July this year, standing at just £653.
Totty added: “Over the past few years, price trends in the rental market and house purchase market have been very similar.
“However, across the first half of this year, house price growth has slowed whilst rental values have continued to increase, perhaps reflecting a change in the relative attractiveness of renting versus buying over this recent period.
“With early signs of the cost of mortgage finance starting to edge up, it will be interesting to see if this recent trend continues or if the change in buy to let mortgage interest tax relief announced in the Summer Budget has any indirect impact on rental values with some suggesting it could further stimulate rental values over time if supply of rental properties is constrained as a consequence.”