New rental index can shed light on increasingly confusing marketplace

This month it was announced that Landbay mortgage lenders will release a new rental Index, alongside Zoopla and data-modelling experts MIAC. 

The index is intended specifically for buy-to-let investors and will aim to provide a clearer picture of the UK private rented sector.

The new index is in response to George Osborne’s July budget, which cut tax reliefs for buy-to-let properties from 45% to 20%, and has deterred potential buy-to-let investors from entering the market. 

By providing a powerful tool for analysing the rental market, Landbay hopes to make investment in the buy-to-let market more accessible and more attractive.

This index will apparently differentiate from other property indexes by reporting rental trends on granular geographical levels (region, country and London boroughs) and analysing rents by the number of bedrooms (studio, one, two, three, greater than 3). 

Published monthly, it will be accompanied by analysis of emerging trends and will include micro-levels of insight combined with wider macro-economic commentary. 

Zoopla, the brawn in this operation, has an estimated 100,000 individual property data points that can be loaded into the index each month and MIAC, the brains, will provide accurate weighting to the data and will interpret the results using its in-house bespoke data management software and the team’s modelling expertise. 

The Landbay Rental Index will shed light on what is currently a complex and confusing marketplace. Hopefully, it should contribute to an increase in buy-to-let investors and the supply of rental properties will increase. 

This will kickstart the market and should, in turn, decrease rental values. Tenants will also benefit from the greater clarity over the fluctuations in the market which the Index will provide. 

As the index is still in the initial planning stages, Landbay haven’t yet released a proposed launch date but they certainly have succeeded in creating a feeling of excitement for a new tool that may perhaps prove to be revolutionary. 

*John Fisher is Head of Lettings at Sotheby’s International Realty