Uncertainty for the value of rent in Bromley following announcements made this week.
Changes in the UK’s inflation rate and private rental prices across the UK threaten the profits of landlords in South East London and the yield of rent in Bromley.
The UK’s inflation rate dropped to 2.6% in July 2017, down from 2.9% (its four year high) last month, following fuel prices which were less than previously expected.
Simultaneously, the Office for National Statistics (ONS) has reported that private rents in the UK increased in the last months by just 1.8%.
Inflation in rental prices has not changed for three months in a row, as these figures show from the Index of Private Housing Rental Prices (IPHRP).
This is obviously bad news for Bromley landlords, as this means that rents in the private sector have gone down, relative to inflation, over the past year.
In much of England rents grew stronger than in the capital. Parts of London saw just 1.3% growth, whereas other areas of England have up to 1.9% growth.
Wales saw 1.1% growth, while Scotland saw the lowest with just 0.2% growth.
While rental prices in the private sector have shown yearly growth less than the Consumer Price Index (CPI), some policy makers remain keen to cap rents at or near inflation.
If this is their plan they will need to be aware that they risk allowing such policies to produce a 69% faster increase in rents than we have seen since July 2016.