Rental inflation has slowed down the most in London. The annual growth registered 4.2%, much less than the UK average.
London is still the region with the highest rent. Zoopla states that the average is now £2121 in the capital, pushed up by the massive demand for rental properties. So why is the rental price growth slowing down?
The report states that rents in London are hitting an affordability ceiling. This means that tenants in London are unlikely to be able to afford to pay rent if growth continues on the former trajectory of rapid growth. Buy-to-let properties in London have become less attractive recently due to expensive property prices and stalling rental growth.
According to Zoopla’s report: “It suggests landlords are becoming more realistic in pricing their rentals and may be taking cost-of-living struggles into consideration when setting new rates, which tend to be exacerbated for those in the rental market.”
However, there is still potential room for growth in other regions, as evidenced by the steeply rising rents in different areas, especially those in the North.
To read more about the UK property investment scene, take a look at some of our buy-to-let area guides covering topics such as investment property available in Bedford and Royal Leamington Spa property investment.