Average rents in England and Wales fell in May
The price of renting property in England and Wales now sits at £792 per calendar month on average, after a rather surprising drop in what tenants are paying in May.
According to the latest rental index released by Your Move and Reeds Rains, the price of renting fell by 0.2 per cent in May this year, which was an uncharacteristic drop for a market that has experienced a long-term average of a 0.4 per cent rise monthly in every May since the recession in 2008.
However, it's not all bad news for landlords and letting agents, as prices on an annual basis still remain far higher than they have been previously. Year on year, property owners have seen their income climb by an average of 1.8 per cent.
Adrian Gill, director of lettings agents Your Move and Reeds Rains, said that May was something of an anomaly, with the normal pressures of supply and demand not having had an impact on the market last month.
Because many landlords were purchasing homes before the Stamp Duty surcharge came into effect at the start of April, the market was somewhat flooded with new homes throughout April and May, and this meant that there was lower competition between tenants, and many were able to secure great deals as a result, which meant price rises faltered.
However, he does not expect this to continue, with taxation changes for landlords across the UK likely to mean there will be fewer homes available to rent in months to come, rather than more, as a growing number of landlords are discouraged from investing.
"The net effect will not be more properties to let, quite the opposite. If new regulations and taxes produce a drought of homes to let, then the overall shortage of housing in the UK will only bite harder for tenants. Meanwhile, this heightened shortage and possibly higher rents as a result could also protect landlords somewhat from the financial effects of more punitive rules and regulations," said Mr Gill.
Find out more about letting agency software