The 3% surcharge for all second home and buy-to-let property purchases from April 2016, announced in the Chancellor's Autumn Statement, is expected to hit the supply of rented homes in the market and push rents up.
- Rents in London are still rising, but not as quickly as earlier in the year. The average new rental is now £1,555pcm, 6.6% higher than the same time last year.
- Average monthly rents in London are now 104% higher than the average for the rest of the UK. Strong growth in rents is being driven by supply shortage, which is nowhere more apparent than in London. The situation in prime central London is very different – with minimal if any rent rises owing to the good availability of luxury homes, meaning tenants can drive a hard bargain with landlords. However, this situation may change as the 3% additional levy on Stamp Duty for buy-to-let and second-home purchases from April next year may put off many investors from becoming landlords.