A growing number of tenants are experiencing rent hikes due to the widening supply-demand imbalance in the market, according to Carter Jonas.
The property firm reports that UK rents have increased by an average of 1.2% over the past 12 months, led by an average gain of 1.2% in the East Midlands.
In contrast, London and the North East have seen the lowest level of growth over the same period, at 0.5% and 0.4% respectively.
Carter Jonas is concerned that rents are likely to continue rising as more landlords are deterred from investing in the sector by recent regulatory and tax changes, as reflected by the drop in buy-to-let mortgage lending.
The government’s legislative clampdown on landlords and letting agents have had market-wide consequences.
The report by Carter Jonas indicates that landlords are continuing to leave the market and that the number of new landlord instructions fell again this year, which has resulted in less stock in the marketplace.
Lisa Simon of Carter Jonas, said: “The weight of heavy legislation is continuing to take its toll on the buy-to-let market.
“Whilst our business fully supports the government’s ambitions to improve standards for both landlords and tenants, the sheer volume of regulation only adds pressure to an already stunted supply of housing. This, in turn, has increased the cost of existing stock.
“The government would do well to prioritise stabilising the private rented sector alongside Build to Rent, at least while the latter is still in its infancy.
“With 4.5 million households currently in the private sector and only 140,000 Build to Rent units built or under construction, this new pipeline of housing caters for just 3% of households currently renting privately.
“The government needs to consider how they can better support landlords as well as tenants, in order to restore the balance between supply and demand.”