Stamp duty rush causes rents to fall
Rents on private accommodation fell by 0.6 per cent last month, to an average of £707, according to the latest Buy-to-Let Index from LSL, a provider of residential property services.
The agency suggests that the fall is likely to be temporary as it is related to an increase in the number of tenants deciding to purchase a property.
Many potential first-time buyers have been rushing to take their first step on the property ladder before the end of the 1 per cent stamp duty exemption on properties worth between £125,000 and £250,000, which takes effect on 24 March.
According to LSL’s figures, the annual inflation rate for private rents fell from 4.3% in January to 3.5% in February, but this is likely to increase again in the medium-term.
Commenting on February’s figures, David Newnes, a director of LSL, said: “With fewer tenants than usual actively competing for properties, combined with a slight improvement in the number of rental properties becoming available, many landlords priced less aggressively to avoid the prospect of a void period.
Despite the fall in February, on an annual basis rents increased by 3.5%, representing a £24 increase over the past year.
However buying a property is still cheaper than renting across most of Britain according to new figures from property website Zoopla.co.uk .
Paying a mortgage is cheaper than paying rent in 84 per cent of the country, including 42 of Britain’s top 50 towns and cities, Zoopla said.
According to Zoopla’s figures, monthly rent in Britain fell by an average of £9 over the past three months, to £1,470 per month in February
Nicholas Leeming of Zoopla.co.uk said: “Despite a recent increase in first-time buyer activity, demand from consumers remains strong and is keeping rental levels at historic highs.
“This, along with historically low borrowing costs, makes it as good a time to buy as it ever has been.”
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