Sluggish rent rises continue as uptick predicted later in year

However, the lender believes that wider market and economic changes are likely to result in rent rises later in the year.

Rents in England (excluding London) grew by 1.18% over the last year, the slowest annual rate since April 2013, while in London they fell by 0.08%.

The average rent paid in England outside of London is now £769, and £1,881 in London.

Scotland rents also rose by 1.07%, less than the national average but by contrast landlords in Wales and Northern Ireland made greater gains, with rents up 1.66% and 1.94% respectively.

Over the medium term the data shows better returns in many regions of the UK.

Rental growth has been greatest in the East England over the past five years (14.67%), while London (6.88%) and the North East (1.90%) have experienced the smallest rises

Landlords price in changes

Landbay CEO and co-founder John Goodall said: “Landlords have been faced with a number of challenges over the past two years, from stricter regulation, reductions to tax relief, and a significant stamp duty tax hike when buying a buy-to-let property.

“Some might have expected this pressure to push up rents, though low interest rates and the Bank of England’s Term Funding Scheme (TFS) have kept the cost of borrowing down and allowed landlords to shoulder some of the costs.

“With a rate rise being just around the corner, and the TFS now having ended, things could be about to change. While we are unlikely to see an immediate impact, the pace of rental growth may well speed up in the latter half of this year as landlords look to price in the changes that have been building up for some time,” he added.

London recovery

However, despite the prolonged dip in the capital, rents have risen by 6.88% over the past five years and, with 17 out of the 33 London Boroughs now in positive territory, it appears it will resume growth in the coming months.

This may be of little comfort to renters in the capital as earlier this week trade union the GMB noted that since 2011 rents had soared while pay had grown by just 9.1%.

The GMB analysis of official data showed that between 2011 and 2017 rent prices for two-bedroom flats in London increased by 25.9% to an average of £1,500 per month, while over the same period, monthly earnings increased by just 9.1%.

In England as a whole, between 2011 and 2017, rent has increased by 18.2%, with the average two-bedroom flat costing £650 per month. Meanwhile wages increased by just 9.8%.