The squeeze on supply, coupled with continued demand for properties from tenants, is likely to lead to continued rental increases across the vast majority of regions in the UK during 2020.
The latest market analysis from HomeLet has taken a regional snapshot covering 12 regions across the UK, with a comparison between January 2019 and January 2020.
Overall, the rental Index shows rental growth of 2.3% across the UK, which is good news for buy-to-let landlords, according to Neil Cobbold, chief sales Officer of PayProp.
Cobbold said: "The latest figures show the market resurgence seen in the sales market has extended to the rental sector.
“There was strong annual growth across most regions in January when compared with the same month last year, with impressive growth of over 5% in the North West, Wales, Scotland and the East Midlands."
“The generally secure market conditions will be welcomed by letting agencies and landlords,” he added.
The market has shifted over the past couple of years as landlords get to grips with the increased costs that come with investing in the buy-to-let market, including the phasing out of mortgage interest tax relief for individual landlords, which will be down to a basic-rate level in April, but the BTL market remains profitable.
Cobbold continued: “There remain some bumps in the road to contend with, including changes to Capital Gains Tax, the final reduction of buy-to-let mortgage interest tax relief and the impact of CMP reform and the Tenant Fees Act throughout 2020.
“Knowing that rents are growing with increases above 5% in some areas will reassure landlords and agents that demand for rental property remains stable as they negotiate a market landscape which continues to evolve."
“Looking forward to the next few weeks and months, there is nothing to suggest rental market prices won't remain steady with annual growth continuing to rise.”
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