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British rent rises tipped to slow this year

PUBLISHED : Wednesday, 06 February, 2013, 12:00am
UPDATED : Wednesday, 06 February, 2013, 4:59am

British residential property rent inflation is expected to slow this year as purchases by landlords boosts supply, Rightmove says, quoting a survey.

The London-based property company said 74 per cent of professional landlords intended to expand their portfolios, and investors would be lured by tenant demand and "attractive" returns.

"Buy-to-let investors, attracted by evidence of sustained demand and strong yields, will provide much needed supply relief," said Miles Shipside, director and housing market analyst at Rightmove.

"Greater supply of rental property coming on tap is good news for tenants."

An overwhelming 83 per cent of landlords said the minimum average return they were seeking was 5 per cent, Rightmove said.

The average British rental yield was 5.73 per cent, meaning the "right balance of rent versus return is being achieved", according to the report.

Separately, Lloyds Bank said a measure of companies' expectations for trading in the next year rose 6 points to an 18-month high of 46 in January.

An index of optimism about the economy fell to a four-month low, it said.

A gauge of jobs growth climbed to 138 last month from 134 in December, recruitment company said.