Rents are predicted to rise significantly in 2017 as landlords pass on their rapidly increasing new costs to tenants according to property investment platform Landbay.  Across the UK as a whole rents have risen slightly this year with the exception of London where rents have shrunk by 0.31%.

John Goodall, Chief Executive of Landbay, says “When you look at the raft of regulatory, political and economic challenges coming to bear on the buy-to-let sector in 2016, it’s clear to see why rental growth has slowed this year, but the fall in rents is unlikely to last – we expect the tide will turn in 2017.”

The new stamp duty levy introduced in April this year for landlords buying new buy-to-let properties caused a spike of purchases which were then released onto the rental market over the summer.  This gave tenants more choice and pulled rents down.

Next year, as the tighter mortgage controls come in together with the removal of tax relief for buy-to-let, pressure will increase on landlord finances with widespread warnings that they will have to increase rents to afford their increasing costs.

Mr Goodall warns that these changes are likely to restrict the supply of rental housing. He says “Tenants will have little choice but to compete for what properties are on offer. As a result we expect rents to rise faster than the pace of inflation next year with growth tripling to 3% by the end of 2017.”