Buy-to-let rents grow strongly in January

Buy-to-let rents are growing strongly outside Greater London with an average increase of 5.5% over the last year.

Rents in the South-East grew fastest of all 7.2%, followed by the East Midlands at 6.8%.

The latest HomeLet Rental Index shows prices rising in the three months to January across 11 out of 12 UK regions compared to the same period last year.

Only the North West of England saw prices dip, falling 3.4% from £646 per month to £624 per month.

The index showed signs of a slowdown in the capital, with rent prices for new tenancies in Greater London rising at the slowest rate for almost two years.

They were still 6.2% higher than one year ago, taking the average new tenancy to £1,510 per month.

Excluding Greater London, the average UK rent is now £740 a month.

Martin Totty, chief executive officer at Barbon Insurance Group, which owns HomeLet, said: “There is still strong demand for rental properties, driven mainly by the impact of the long term structural imbalance in supply and demand of property." 

Totty said there has been a further fall in average private rental growth in Greater London.

“In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London and that rents will now track other parts of the UK more closely.”