Rents have increased nearly twice as fast over the past year as they did in 2018, according to an index.
Across Britain, the average cost of a private rental home increased 2.1% year-on-year in November 2019, nearly double the 1.1% increase seen in November 2018, Hamptons International said.
The average rent of a newly let home in November 2019 was £989 per month – around £20 more a month compared with a year earlier.
Southern regions recorded the strongest rental growth in 2019, the index found.
Rents in the South West of England increased by 4.2% year-on-year in November, followed by the South East (4.1%) and the East of England (2.6%).
Hamptons International said the falling number of landlord purchases over the last few years has meant the number of homes available to rent has dwindled, particularly in London and the South – and the lack of new supply has driven rental price growth.
But there are signs that investors are starting to return to the market, particularly in London.
During the first 11 months of the year, landlords bought an estimated 11% of homes sold in Britain, the same level as last year.
Landlords purchased 13% of homes sold in London during the first 11 months of 2019, up from 11% during the same period of 2018.
This was the first increase since 2015, but is partly due to fewer owner-occupiers making property transactions, the index said.
Aneisha Beveridge, head of research at Hamptons International, said: “Tax and regulatory changes announced in 2016 have resulted in fewer landlord purchases, particularly in the South, causing some landlords to sell up…
“However, after four years of falls there are now signs that landlords are beginning to return to the market – particularly in London where house price falls and steady rental growth are gradually enticing investors back.”
The Hamptons International lettings index uses data from letting agent Countrywide Group to track changes to the cost of renting.
Here are average monthly rents for newly let properties in November 2019 according to Hamptons International, with the annual increase:
– London, £1,724, 1.1%
– South West, £851, 4.2%
– South East, £1,076, 4.1%
– Scotland, £673, 1.5%
– Midlands, £694, 1.2%
– North, £641, 0.2%
– East, £984, 2.6%
– Wales, £671, 2.0%