Rising rents in the property market in the UK peaked

Rental growth in the market of real estate in the UK slowed in the second half of 2016 and during the year the growth rate was only 1.7%, which is much less than 3.8% in 2015.

Data obtained from the real estate Agency “HomeLet” indicate that the average rent on the property throughout the UK was in December 2016 £892 per month, slightly more than £877 in December 2015.

In London rents increased from £1478 to £1508 per month, is quite low in percentage terms. But rent in London continues to be the highest in the country.

The share of rents from the General income of the taxpayer before tax is 28% UK and 31% in London .

2016 can be divided into two parts – the first half of the year, rental prices grew and grew 4%, reaching its peak in June and then began to fall until December 2016, when little played a fall.

However, inflation in the rental market of residential real estate outpaced overall inflation data. In 2017, most likely, the increase in rental prices will slow down. Despite the fact that the demand for rentals remains high, it is impossible not to take into account the purchasing power of the tenants, which – derived from the General inflation rate.

Most likely, inflation in the second half of the year the housing market has reached its ceiling. Next year the income of homeowners will increase due to the reduction of tax benefits for mortgage lending. The assumption that “landlords” are able to shift their costs onto the shoulders of the tenants is unlikely to work if the inflation in the rental market will outpace the growth in wages.

A breakdown by regions shows that the highest was the rising rents in Northern Ireland by 6.4% in 2016, followed by the North-East of England with an increase of 4.9% and then Wales with prices rising 3.9%.

® Maxim Savitsky. 11.01.2017 G.

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