12% jump in number of available rental properties leads to slowest annual rate of increase since 2014
- Overhang of last year’s buy-to-let surge leads to more choice for tenants and slower annual rate of increase in rents:
- Number of available rental properties on Rightmove up 12% compared to the same period last year
- Annual asking rent growth of 1.8% is the lowest since Q4 2014, and less than half the annual growth of 3.9% recorded a year ago in Q1 2016
- Uplift in available properties means it is taking 10% longer for letting agents to secure suitable tenants than this time last year, and almost 20% longer in London
More property options for tenants has led to a slower pace of rental growth so far in 2017. For the first time since 2014 asking rents outside London fell in the first quarter of the year, down by 0.4% on the previous quarter. This has led to a modest annual increase of 1.8%, the lowest rate since Q4 2014 and less than half of the annual growth of 3.9% recorded a year ago.
New rental properties coming to market have been increasing since the rush of buy-to-let purchases ahead of the additional stamp duty that came in last April. The result is a 12% increase in available properties for tenants to choose from compared to the first quarter last year, meaning that letting agents need to work harder to secure suitable tenants for their landlords’ properties, to ensure any void periods are limited.
The time it takes to let a property has been calculated based on agents who have marked properties as let agreed on Rightmove. Nationally, it’s taking 10% longer on average to secure tenants than the same period last year. The time has increased in all regions except Wales, which has sped up by 5%.
In London, asking rents rose 1.5% compared to last quarter, but annually the price fell by 4.2%. Rental prices have been falling over the past year in London as stock has been increasing, so it’s not a surprise that it is the most affected region for the length of time to secure a tenant, with properties now taking 20% longer to let than this time last year.
Rightmove’s Head of Lettings Sam Mitchell comments: “The supply boost following last year’s buy-to-let frenzy in the first few months of the year has continued through to 2017, introducing more competition in the market for letting agents trying to secure suitable tenants for their landlords’ properties. This extra choice for tenants in many areas has inevitably led to properties taking longer to let than this time last year. However, agents are still reporting that well-priced properties in popular areas are letting quickly. The new tax changes that started to phase in from this month may also lead to some landlord’s selling off properties and the extra stamp duty on buy-to-lets may deter some landlords from expanding their portfolios, so now seems to be the right time for tenants who want to have more choice to look around. Agents’ properties need to stand out even more than before, so carefully considering how your property is presented is really important. Now might be the right time to encourage landlords to give the place a lick of paint or some new furniture to give them the edge to help secure the right tenant.”
Time to let