Despite whatever you might have read in the property pages of leading newspapers, rental inflation remains subdued. Actually, it edged down 0.1 percent in May to 3.4 percent; only a fraction higher than the CPI inflation rate and almost a full percent lower than the RPI rate.
Today's numbers only go to prove that the buy-to-let bubble has done wonders for renters throughout the UK. When compared to retail prices and average earnings growth, rents have grown at a slower rate over the last ten years.
Unfortunately, the good times could be coming to an end. The credit crunch threatens to scare off would-be amateur buy-to-let landlords. Renters need these jokers to keep coming into the market, since they maintain an ready supply of rented accomodation.
Thankfully, it hasn't happened yet. Despite the credit crunch during the first quarter of 2008, lenders handed out around 49,000 new BTL loans. This should keep rents lower for the foreseeable future.