The cost of renting rose by just 1.6% last year, the smallest increase in seven years. A greater number of homes coming onto the rental market saw the growth in rental costs half compared to the previous year with London actually recording a drop.
However, Countrywide Estate Agents forecast rental prices would pick up due to a restriction in rental properties available as landlords choose not to increase their portfolios in light of the stamp duty rise introduced last April.
In London the average rent fell by 2.9% according to Countrywide with central London seeing a near double digit fall as rental costs fell by 9.4%. Separate lettings data also pointed to a fall in rent prices in the capital and Rightmove recorded a fall of 4.4%.
The CEO of London Central Portfolio, Naomi Heaton, says “Demonstrating a market dynamic which was conspicuous during the credit crunch, the uncertain economic outlook has resulted in tighter tenant budgets, putting a downward pressure on rents in the luxury rental sector. This has been compounded by increased numbers of properties to rent as owners defer sales in a softer market. In contrast, the mainstream market has continued to put in a positive performance, being far more accessible to the wider tenant pool.”