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London’s Generation Rent can breathe a sigh of relief as rents fall

Rents are rising faster outside London than in the capital for the first time since 2010.

Countrywide reported that in the year to November, average rents in London fell 0.7%, but this is still 60% higher than the rest of the country.

This is the first time in five years that this gap has narrowed, partly due to the flood of rental properties that hit the market as investors raced to snap up buy-to-let properties before stamp duty was hiked up 3% in April.

Johnny Morris, research director at Countrywide, said: “Higher than usual numbers of homes available to rent has boosted tenants’ negotiating power. Stock growth has outstripped that of tenants.

"This is in part due to the hangover from the rush to beat the 3% stamp duty charge earlier in the year and a shift in stock from the sales market. With more choice and facing stretched affordability, many tenants are using their new found negotiating power to agree lower rents than in 2015."

Asking prices for properties for sale have fallen 2.1% in December, according to the property portal Rightmove. It said that this was in line with seasonal dips in the last six years, but that traffic to the website was in fact up 9% compared to last year.

Miles Shipside, the director of Rightmove, predicted that house prices would rise just 2% next year. He said: “The price of property coming to market in 2016 is currently up by 3.4% compared to a year ago, so while a forecast rise of 2% in 2017 is a lessening of the pace, it would still be the seventh consecutive year of rising property prices."

This news is well received by potential tenants looking to rent property in the City, who may have struggled with high rent payments, forcing them to move further out into the suburbs and commute in for work. It will mean more choice of properties available and better value for money.

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