Renters’ Rights Act fuels rent growth

Rent growth has accelerated across five of England’s nine regions since the Renters’ Rights Act took effect in May, despite the national rate being unchanged.

Average monthly rent across England rose by 0.6%, from £1,442 to £1,451, exactly matching the increase recorded during the equivalent period before the Act’s implementation.

The West Midlands recorded the biggest rise from 0.2% before the Act took effect to 0.8% afterwards.

In the North West, rents increased by 1.2% compared with 0.7% during the previous equivalent period, according to analysis by Benham and Reeves.

Demand returns after Act

A director of Benham and Reeves, Marc von Grundherr, said: “The Renters’ Rights Act has been one of the biggest changes to the rental sector in years and it inevitably created a degree of uncertainty amongst both landlords and tenants in the run-up to implementation.

“We saw many tenants sitting on the fence while they waited to see what the new landscape would look like, rather than committing to their next move.

“Now that implementation has happened and there is greater clarity around the rules of engagement, we’ve seen that pent-up demand start to return to the market.”

He added: “At a national level, rental growth has remained consistent, but the fact that rents are now rising at a faster rate across more than half of England’s regions suggests that this renewed activity is already starting to make itself felt.

“For landlords, this demonstrates the continued strength of the underlying rental market.

“Tenant demand remains extremely robust and, with rental stock still limited in many areas, an increase in activity naturally creates greater competition for the homes that are available.”

Regional rent growth

Yorkshire and the Humber saw rent growth rise from 0.5% before implementation to 0.9% afterwards, with the North East recording the same change.

London also moved higher, with average monthly rent increasing by 1% from £2,294 to £2,317, compared with growth of 0.6% in the earlier period.

The East Midlands was unchanged at 0.4%.

Growth slowed, however, in the East of England, South West and South East.

London borough rents

Some London boroughs recorded larger changes, with Southwark rents rising by 1.5% since implementation compared with 0.3% beforehand.

Kensington and Chelsea moved from a 0.2% fall in the previous period to an increase of 1.1%, while Greenwich accelerated from 0.4% to 1.4%.

Ealing recorded growth of 1.2%, up from 0.4%.

Enfield and Merton posted the strongest increases since implementation at 1.8%, compared with previous growth of 1% and 1.5% respectively.