Rents across the UK have fallen over the summer for the first time in at least six years, driven by the flood of properties onto the market since last year’s stamp duty changes, according to Rightmove.
National asking rents outside London fell by 0.2% in the third quarter of 2017, the first drop recorded at this time of year since Rightmove began tracking data in 2011.
The drop was fuelled by the South East, with rents down 2.3% on last quarter.
Since last year’s second home stamp duty changes came into force the supply of new rental properties in the South East has been steadily increasing – up 5.5% on this time last year. This flood of homes on to the market has distorted the national picture, dragging down the average UK rate.
Across the UK rents rose in every region, apart from Greater London and Yorkshire and the Humber.
Asking rents for new properties coming on to the market over the summer months usually rise as it is one of the busiest times of year for tenants looking for a home. However, whilst demand is still strong, rents are pretty much at a standstill.
Sam Mitchell, Rightmove’s head of lettings, said: “Agents are reporting that some investors looking for better yields are shifting their focus from London to instead buy in the surrounding counties of Surrey, Berkshire and Buckinghamshire.
“The increase in stock in the South East has led to softening in rents in some areas where there is less competition among tenants, but they are holding up in key commuter areas where tenant demand is strong.”
Asking rents in London have continued their downward trend this month, falling 3.3% in the year to September to £1,920 – their lowest at this time of year since 2013.
“It appears that rental investors are starting to move their money away from London with a number of agents across London saying that investors are being replaced by first-time buyers. This is likely to constrict rental supply in the capital and lead to rents increasing again, so now would be a good time for prospective tenants to act, before this happens,” said Mitchell.
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