London recorded a rise in rents in July following eight consecutive months of falls, according to Countrywide’s latest monthly letting Index.
Rents in the capital ended the month 2.1 per cent up on last year as the number of properties available to rent in the capital fell sharply. Across the country, the rate of rental growth doubled from 1.1 per cent in June to 2.2 per cent in July.
Countrywide pointed out that the fall in the number of homes available to rent in London has been driven by a drop in the number of landlords buying since the new stamp duty rates.
In July, the proportion of London homes bought by a landlord fall to the lowest level for seven years. Just 10.5 per cent of the homes sold in the capital last month were bought by a landlord, the lowest level since August 2010 (9.7 per cent) and half the 2015 average (20.9 per cent).
Johnny Morris, research director at Countrywide, said: “The rush to beat higher stamp duty rates in April 2016 caused a spike in the number of homes to rent, but that has now worked its way through the market.
“The stock of homes to rent is now falling in the more expensive parts of the country because higher tax rates have dissuaded large numbers of landlords from buying. Ultimately this means fewer homes on the market and higher rents.
Across the midlands and the north, higher rates of stamp duty are much less of a disincentive to investors. Here the number of homes on the market remains up on last year, buoyed by investors living in London and the south east choosing to buy in the Midlands and the north.”