Rents fall in Nottingham and Liverpool

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by Gill Montia

Latest figures from the housing intelligence firm, Hometrack, show that rents in Liverpool and Nottingham dropped by an average of 2% in the first three month of this year. In Newcastle, rents remained static during the quarter.

The trend reflects an oversupply of properties brought about by the boom in the development of buy-to-let flats in some of the UK’s city centres, in recent years.

Large numbers of these properties were sold to amateur landlords. Some were sold off-plan through property investment clubs that guaranteed rental returns for a set period.

However, investors are now discovering that this level of rent is not achievable in the longer-term.

In addition, the value of some city centre flats has plummeted and given that the buy-to-let mortgage market has shrunk dramatically in recent months, investors could face difficulties remortgaging.

Along with mainstream lenders, buy-to-let mortgage firms have increased their deposit requirements and interest rates.

Turning to the larger picture, rents across the UK have increased by around 4% in the past year, with rises at their highest in central London.

Hometrack is positive about the future and expects the majority of buy-to-let investors to see rental income increase over the coming 12 months.