Tenant Fees Bill
The most significant short term change is surely the Tenant Fees Bill, the draft of which was published this week. The banner headline from the draft Bill is that all fees to tenants are to be banned, which is a big win for renters. Once this Bill comes into force a tenant will only have to pay the rent as advertised and there will be no other surprise fees from agents. From a landlord’s perspective it is unlikely that there will be any day to day differences, but it is important to know as the situation for letting and management companies is set to change.
Are rents about to rise?
In possibly related news, there is new speculation that rents are going to rise in the near future. The buy-to-let sector has weathered tax changes and a rise in Stamp Duty in the last 18 months or so and rents have risen at an average of only 1% over the last year compared to a 5% rise in house prices over the same period, according to Property Reporter. While it is true that house prices have historically grown faster than rents, this seems like an anachronism and it is quite possible that rents will begin to rise more quickly in the near future now that the market has settled slightly.
It is also worth noting that the Central London prime rental market has been declining for at least a year now and that has had an effect on the overall market. The capital is so large that its influence is outsized, and it has almost cancelled out larger rent rises elsewhere in the country, for instance the North of England has seen rental growth of approximately 5% over the last year.
Growing influence of the Northern market
...and on that subject – new research from Commercial Trust Limited states that the Northern market is beginning to have a larger influence on the buy-to-let market as a whole. The North West saw year on year growth in buy-to-let purchases of almost 25%, and Yorkshire and the Humber has seen year on year growth more than three times as high as that at 77.6%.
This reflects the growing number of landlords who are leaving the capital and heading North to cities such as Manchester, Sheffield, Liverpool and Leeds. The low entry prices, growing populations and high demand for rental properties in these cities are extremely attractive to investors, and it is likely that this trend will continue in the future.
If you are looking to invest in Northern buy-to-let residential property then please get in touch today!