New research by property management firm, Apropos by DJ Alexander, has found that due to static rent prices and reduced tax relief hitting profitability, many landlords are feeling the squeeze.
A recent study by property management firm, Aprospos, revealed that in England the average private rental price increase has fallen from 1.7% in 2014 to 1.1% at the end of 2018. At its peak between 2015 and 2016 the average rental increase was circa 2.6%.
During the same period, Scotland’s average prices fell from 1.7% down to 0.6%. Wales, on the other hand saw a small increase from 0.5% to 0.8%. The Scottish market peaked between 2013 and 2015 with an average increase of circa 1.9%. Whereas, Wales peaked more recently, between 2017 and 2018, at approximately 1.35%
There has been a wide spread of variations across the UK with the best region, with an average increase of 2.7% over a 2 year period up until Dec 2018, being the East Midlands with London performing worst falling from 2.8% to just 0.2% over a 5 year period.
Worse news yet for Landlords, since the last quarter of 2017 the average increase fell to less than 1% and the last 6 months has seen the rate range between a negative to just 0.2%
David Alexander, joint managing director of Apropos by DJ Alexander Ltd, had this to say: “The tightening of rent price increases could not have come at a worse time for many landlords who have just had the third phase of George Osbornes’ policy of decreasing tax relief coming into force on April 6th…..”
David continued: “Of course, many landlords may be considering selling up, but they need to think carefully as the rules are changing and if they sell after April 2020 there could be more bad news from a further loss of tax relief… “
Effectively it has, become more expensive to buy a rented property, more expensive to run it, and less profitable to sell it.”
David concluded: “Clearly some parts of the UK remain buoyant and returns are healthy. But for other areas there may be choppy waters ahead….”
Click here to view original web page at www.propertyreporter.co.uk
