2016 asking rents rose 3%, with the north leading the way

by Gary Whittaker

The average asking price in the PRS rose by three per cent throughout 2016, as the market continued to improve and proved itself as resilient once again in the face of uncertainty, according to new data released by Rightmove. 

The report from the property portal shows that across the year as a whole, all regions in the UK experienced a rise in asking prices as landlords felt more confident about the sector, except for London, where there was a marked fall. 

In the capital, rental asking prices dropped by as much as 4.4 per cent year on year thanks to the uncertainty, leaving London far behind the annual leaders in the north. Yorkshire and the Humber saw by far the largest rise when compared to 2015, with average asking prices having jumped by 4.5 per cent. 

The north-west also performed well, with a total rise of 4.4 per cent, and both of these northern regions did well to overcome the East of England, which had been the fastest rising of the year right up until the last quarter of 2016. 

In the year ahead, Rightmove expects that asking prices will continue to rise, although they will still sit around the same level of increase as seen this year, largely thanks to the uncertainty that will keep many landlords guessing about how the market will play out. 

Overall for the year, Rightmove said, asking prices in 2017 are likely to be four per cent higher than in 2016. 

"This year will be one of caution for buy-to-let investors due to tighter lending criteria and increased stamp duty. We definitely won’t see the spike in the first quarter purchases that we saw last year as landlords rushed to buy before last April’s new stamp duty deadline," said Rightmove’s head of lettings Sam Mitchell.

"If the tax changes being phased in from this April lead to even fewer buy-to-let purchases and some landlords deciding to sell, then a tightening of supply in some areas will lead to increasing rents. We forecast that asking rents could rise by four per cent outside London by the end of 2017, though in London prices are likely to stay flat," he added.

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20-January-17General Lettings News